EV-Ready India: Union Policy Updates 2024-25
Author: Meheli Roy Choudhury; Editor: Pradeep Karuturi, Neha Gupta
India’s electric vehicle (EV) landscape is evolving rapidly, driven by ambitious goals of decarbonisation of the mobility sector, enhancing energy security, aiming for localisation of manufacturing processes and promoting sustainable transportation. Over the last few years, India has implemented many policies at the central and state level to the effect of advancing EV adoption. Such policies aim at the demand and supply side, covering stakeholders such as manufacturers to consumers throughout the extent of the EV value chain.
This blog is a working document designed to track all significant union-level policy updates for 2024 in the EV space. It will be periodically updated with new policy notifications, and amendments to existing policies as they are announced. As a living document, it will capture the latest trends and shifts in government priorities and reflect how these policies impact various stakeholders, from manufacturers and fleet operators to individual consumers.
Scheme to Promote Manufacturing of Electric Passenger Cars in India
India’s electric mobility transition is looking towards an enhanced focus and a policy priority to position India as a major global hub for the manufacturing of electric vehicles (EVs). This is in line with the flagship “Make in India” campaign and in spirit with the “Atmanirbhar Bharat” initiative, which the Government of India is spearheading to bring in domestic investment, self-reliance and technological advancement. It aims to provide import duty concessions for companies setting up manufacturing units in the country with a minimum investment of $500 million in three years for manufacturing e-4Ws. It has been notified that EVs of a minimum value of $35000 can be imported at 15% duty up to the year 2031 by companies that set up manufacturing facilities under the scheme. The approved applicant will be required to achieve a minimum Domestic Value Addition (DVA) of 25% within 3 years and 50% within 5 years from the date of issuance of the approval letter by the Ministry of Heavy Industries (MHI).
This policy titled Scheme to Promote Manufacturing of Electric Passenger Cars in India announced on March 15, 2024, is poised to bring in a larger quantum of investments, offer a larger variety of eco-friendly premium-quality, high-end EVs, create opportunities for upskilling, job creation, ensure a domestically oriented supply chain in India. It has garnered positive attention as a forward-looking policy within the automobile sector, public and private players inclusive. Additionally, this is a green signal to re-direct foreign investment from big global players such as Tesla, VinFast, and Jaguar Land Rover to locally invest in setting up manufacturing plants and developing the EV production ecosystems.
The Union Budget 2024–25 presented on July 23rd 2024, by Finance Minister Nirmala Sitharaman, announced various measures to support the development of the EV sector in India. The budget highlighted the need to reduce dependency on critical minerals sourced from other countries by announcing a full 100% exemption of customs duties on 25 critical minerals. These are essential and used in the manufacturing of EV batteries which typically account for 40% of the cost of a vehicle. Hence, reducing the customs duties on these minerals will help lower the battery manufacturing costs, eventually percolating to reducing the cost of EVs as well.
The following minerals which are instrumental within the EV ecosystem are listed under customs exemption, as per Table 1:
In addition, a Critical Mineral Mission has been announced which will assess the avenues for domestic production, recycling of critical minerals, and reduce overseas acquisition of critical mineral assets. This has positive implications for the EV sector since these exemptions will drive down the costs associated with battery manufacturing and hence, make EVs more affordable in the market. India has initiated its first exploration of lithium mines in the Katshora region of Korba district, Chhattisgarh after the Geological Survey of India (GSI) confirmed the presence of significant lithium deposits. This has garnered significant attention in light of the less-than-enthusiastic response to the lithium block auction in J&K earlier this year.
PM-eBus Sewa-Payment Security Mechanism (PSM) scheme
The PM-eBus Sewa-Payment Security Mechanism (PSM), a Government of India initiative, announced on September 11, 2024, is designed to support the rollout and financial sustainability of electric buses (e-buses) across India. The scheme forms part of the PM-eBus Sewa program, which aims to enhance urban mobility and public transportation through the adoption of electric buses in cities and towns.
PSM has been approved for the operation and procurement of e-buses by public transport authorities (PTAs) with an outlay of Rs.3,435.33 crore. This scheme will support the deployment of more than 38,000 electric buses (e-Buses) from FY 2024–25 to FY 2028–29.
There are growing concerns about the hitherto lower operational costs of e-buses. To tackle this issue, Public Transport Authorities (PTAs) are adopting electric buses through the Gross Cost Contract (GCC) model under public-private partnerships. The model below is the diagrammatic representation of the GCC model.
In this model, PTAs avoid paying upfront for the buses; instead, Original Equipment Manufacturers (OEMs) or operators handle procurement and operations, with PTAs making monthly payments. However, OEMs and operators remain cautious due to the risk of payment defaults. The Payment Security Mechanism (PSM) scheme aims to resolve this by ensuring timely payments through a dedicated fund. In cases where PTAs default on payments, CESL, the implementing agency, will cover the amount from the scheme’s funds, with PTAs, states, or union territories reimbursing the fund later.
Guidelines for Installation and Operation of Electric Vehicle Charging Infrastructure 2024
The Ministry of Power (MoP) issued the guidelines for the EV charging infrastructure on September 18, 2024, making it applicable to manufacturers, owners and operators of EV charging stations, power utilities and central, and state agencies. Details about the guidelines can be understood through Table 4.
Together with strong governmental support and public participation, India’s EV policy landscape is undergoing a critical transformative phase, driven by the need for sustainability, energy security, and robust investment climate. These recent updates signal a clear commitment to fostering a holistic approach to addressing both demand and supply challenges. As India continues to scale up EV infrastructure, charging networks, and local manufacturing, the country is well-positioned to become a global leader in the electric mobility transition.
PM E-DRIVE- Notification and Operational Guidelines
The Prime Minister’s E-DRIVE (Electric Drive Revolution in Innovative Vehicle Enhancement) scheme was announced on September 11, 2024. Highly anticipated since the FAME 2 scheme ended on March 31, 2024, PM E-DRIVE is positioned as a natural continuation of the legacy of FAME, however, with some much-awaited and interesting revisions.
The new policy has an outlay of Rs. 10,900 crore for a period of 2 years with policy provisions in favour of e-buses, e-trucks, charging infrastructure, and testing agencies. It has a forward-looking vision by bringing in e-ambulances in the bid towards integrating comfortable patient transport within the ambit of clean mobility, a first for the country, joining USA and UK in this endeavour. The following chart shows the allocation of the policy outlay across different categories. Interestingly e-buses have been kept outside of the other components for which demand incentives are allocated and has a major share of allocation for its expansion. This highlights the center stage spotlight which e-buses have received in the Indian EV ecosystem. Additionally, the Electric Mobility Promotion Scheme (EMPS) 2024 initiative, which is being implemented from 1st April 2024 to 30th September 2024, will be incorporated into this scheme.
The operational guidelines for the PM E-DRIVE scheme was announced on 29th September, 2024. The scheme is effective from 1st October 2024 until 31st March 2026.
Image 4 highlights components supported under PM E-DRIVE:
Based on the aforementioned components of the scheme, Chart 1 shows the year-wise allocation for the same:
This highlights a shift towards electrifying public transportation in India with such a quantum of investment in e-buses. It must be noted that the funds allocated for e-buses, charging infrastructure, and testing agencies will remain dedicated to these purposes only and cannot be diverted to other uses. The principle of fungibility does not apply to these components, and any unutilised funds in these segments will lapse if not utilised.
Demand Incentives
To drive higher adoption of EVs, demand incentives will be given only to e-2Ws, e-3Ws (including registered e-rickshaws & e-carts and L5 type), e-ambulances, e-trucks and other emerging EV categories.
Demand incentives are directly correlated with battery capacity. To circumvent the issue of high-end vehicles availing incentives, the ex-factory price of different vehicle categories has been capped. Table 3 highlights the number of vehicles which are to be supported under the scheme with the corresponding incentives for the vehicles, and funds from MHI.
As per recent MHI notification dated 25th November as a modification to PM E-DRIVE scheme, it has been noted that the maximum number of vehicles to be supported under registered e-3w L5 category for FY 2024–25 has already been exhausted signalling a great development for e-mobility in India. The new amendment, thusly, will cater to provisions listed under FY 2025–26 to be made operational from 8th November 2024 toll 31st March 2026.
It is noteworthy that 4Ws as a separate category was not mentioned in the revised scheme. Though the scheme doesn’t mention the number of e-trucks and e-ambulances which must be sanctioned, they have been allocated Rs. 500 crore, respectively. With trucks, incentives will be given to those who have a scrapping certificate from MoRTH-approved vehicles scrapping centres (RVSF).
Conditions to avail Demand Incentives:
To qualify for demand incentives, OEMs must first register themselves and subsequently, each of their EV models must be approved by MHI and revalidated every year. These vehicle models must meet the minimum technical eligibility criteria for performance and efficiency and undergo type approval following the standard test procedures at recognised testing agencies, as per Rule 126 of CMVR. Technical eligibility standards for emerging EV categories, such as e-ambulances and e-trucks, including factors like range, electricity consumption, speed, and acceleration, will be issued separately. Additionally, e-ambulances must comply with standards set by the Ministry of Health and Family Welfare (MoHFW).
The qualifying criteria to avail the incentives means the EVs:
- Must be manufactured in India, including assembly of parts to be localised,
- Must comply with CMVR provisions for type approval, classification, categorisation, definition, roadworthiness, and registration,
- Must obtain a PM E-DRIVE eligibility certificate from recognized testing agencies,
- Must include a comprehensive warranty, covering the battery, from the manufacturer,
- Must provide adequate after-sales service for the vehicle’s lifespan,
- Must be fitted with devices in e-3W, e-ambulance, e-bus and e-truck to monitor their mileage and determine total fuel savings on a real-time basis
- Must have specific branding indicating that it was purchased under the Scheme
How to avail demand incentives?
The Government of India (GoI) has announced the system of e-vouchers for availing the demand incentives. These will be generated at the time of sale. The manufacturers of vehicles (OEMs or Original Equipment Manufacturers) will submit their claims for reimbursement of demand incentives regularly to MHI for settlement.
These will be made available for consumers (buyers/end users) in the form of an upfront reduced purchase price of EVs to enable wider adoption, which will be reimbursed to the OEM by the GoI. It must be noted that each individual buyer/beneficiary will be eligible to receive an incentive for only one EV per category. Image 6 shows a step-by-step process of the same.
Guidelines for Dealers to be followed at the time of sale of vehicle
The dealers must collect information from the customers at the time of purchase. Aadhaar is central to this process. Dealers will use Aadhaar e-KYC authentication with face recognition for individual customers through the PM E-DRIVE app, available on the MHI website, Google Play Store, and Apple App Store. To enable face recognition, dealers must also install the AadhaarFaceRD app. Additionally, dealers will upload one photo ID proof (e.g., PAN, driving license, voter ID, or passport) of the customer. The e-voucher will be generated via the PM E-DRIVE portal.
Dealers must ensure that only one customer can avail incentive for one vehicle of that category for individual buyers. There are no restrictions of this kind for non-individual buyers. After registration at RTO, dealers shall generate an e-voucher having a unique identification number from the PM E-DRIVE portal.
E-buses
Details regarding e-bus management are mentioned in Table 4 below:
Charging Infrastructure
Scheme outlay: The scheme has sanctioned Rs. 2000 for the rollout of public charging infrastructure.
Area of operation: Apart from setting up stations within the expanse of the city, it is also applicable to setting up charging stations for inter-city/inter-state highways to make them EV-ready.
Other details: Charging infrastructure projects may encompass various initiatives needed for vehicle electrification, such as pantograph and flash charging. The integration of renewable energy sources with charging infrastructure, smart grids, and the use of ICT will be promoted. Funding flexibility may be provided to cover up to 100% of the project cost, including upstream power infrastructure, to support the development of charging infrastructure and promote electric mobility. There must be branding of the PM E-DRIVE scheme on the EV PCS chargers.
Table 5 shows the number of fast chargers to be installed corresponding to the vehicle categories as per the notification.
Testing Agencies
Scheme details: Testing agencies are essential for the assessment of electric vehicles (EVs) under the CMVR and PM E-DRIVE Scheme. To address this need, a budget allocation of Rs.780 crore has been made under the scheme.
Vehicle Testing details: E-vehicles procured under PM E-DRIVE are required to undergo conformity of production tests by the testing agencies at least once a year. This will entail an annual strip-down test for EVs in the presence of the manufacturers, chosen randomly to check compliance with PMP. To facilitate this process, the testing agency may randomly select EVs from either (i) customers who have purchased EVs under this scheme or (ii) directly from the OEM’s plant. The cost incurred by the testing agency for procuring vehicles from customers for strip-down testing will be reimbursed by the OEM.
Administration of the Scheme including IEC
The administration of the PM E-DRIVE Scheme, including Information, Education, and Communication (IEC) activities, is crucial for its effective operation and implementation. To ensure smooth functioning, there will be a need for knowledge partners, technical expertise, and logistical support, including the development of a web portal. To facilitate these efforts, a budget of ₹50 crore has been proposed for IEC activities.
Phased Manufacturing Programme (PMP)
This was implemented under the FAME-II scheme outlining localisation of EV components which were to be followed by manufacturers. Similarly, PM E-DRIVE has also earmarked certain items for eligibility. This is a demand-driven scheme, and the incentives or grants provided under it will be separate from and additional to those offered under the Production Linked Incentive (PLI) Scheme for the automobile and auto components industry (PLI-Auto) as well as the PLI Scheme for advanced chemistry cells (PLI-ACC). However, MHI will encourage State and UT governments to offer both fiscal and non-fiscal support for electric vehicles.
Monitoring of the scheme
An inter-ministerial committee, viz. Project Implementation and Sanctioning Committee (PISC), chaired by the Secretary of Heavy Industries, has been formed to oversee the execution, approval, and monitoring of the PM E-DRIVE scheme. The committee is also responsible for resolving any challenges or issues that may arise during the implementation phase. The powers of the PISC are summarised in Table 6 below:
Mission for Advancement in High-impact Areas (MAHA): EV-Mission
The Anusandhan National Research Foundation (ANRF), a statutory entity under the Government of India, has been established to spearhead, fund, and coordinate research and development across institutions nationwide. Its focus lies on addressing national priorities, advancing emerging scientific frontiers, and supporting strategic research areas. Under its Mission for Advancement in High-Impact Areas (MAHA) programme, ANRF facilitates solution-oriented, mission-driven research. This initiative fosters collaboration across multiple institutions, disciplines, and investigators to tackle scientific challenges and drive technological progress in critical areas. The foundation has identified Electric Vehicle (EV) Mobility as a priority area under the MAHA programme.
The EV-Mission aims to advance research and development for widespread EV adoption in India by cultivating an ecosystem of innovation across the value chain that supports self-reliance through indigenisation and global competitiveness. It aims to bridge current gaps through targeted research while pursuing breakthroughs, ensuring India’s position at the forefront of the EV revolution. The R&D focus will help bring down the costs and help in evolving local supply chains that include the development and testing of battery components, other EV components and EV charging infrastructure. Vehicle categories such as 2W, 3W, and 4W passenger and light commercial vehicles, and medium and heavy vehicles such as trucks and buses are targeted under the mission.
Image 7 depicts the three technology verticals under this mission:
- Tropical EV Batteries and Battery Cells- The focus is on the following sub-domains, but not restricted to as shown in Table 7:
1.1. Cell Technologies and Materials: Table 8 highlights the focus areas for this sub-domain:
1.2. Implementation of Batteries in EVs
- Battery characterisation, modelling, and diagnostics: Tools will be developed to to ensure battery safety catering to the Indian climatic conditions
- Battery Management System
- Battery Pack Design and Thermal Management System: Focused on low-energy cooling for Indian ambient conditions
1.3. Battery Circular Economy
- Development of cell chemistries that require lower cobalt or nickel content may be considered
- Material recovery through recycling will be undertaken
2. Power Electronics, Machines and Drives (PEMD): The mission will focus on the following sub-domains, but not restricted to-
2.1. Motors
This focuses on the development of advanced indigenous technologies for EV motors (Induction Motors, PMSM, PMaSynRM, AFM, SRM) with superior efficiency, power density, or lower costs. Table 9 highlights the focus areas for this sub-domain
2.2. Power Electronics: Table 10 highlights the focus areas for this sub-domain-
2.3. Control of Motors of EVs: Table 11 highlights the focus areas for this sub-domain-
3. Electric Vehicle Charging Infrastructure: The mission will focus on the following sub-domains, but not restricted to-
3.1. Low Power Charging Methods and Charging Infrastructure: Table 12 highlights the focus areas for this sub-domain-
3.2. High Power Charging Methods: Table 13 highlights the focus areas for this sub-domain-
- Charging Infrastructure and Grid Issues: Table 14 highlights the focus areas for this sub-domain-
The mission will establish e-nodes across the country with the following roles:
- Generate new knowledge, develop advanced technologies, and enhance skills in key areas
- Act as a repository for research findings, patents, and cutting-edge technologies
- Prioritise translational research and technology development across various Technology Readiness Levels (TRLs)
- Facilitate product development, training, technology commercialisation, and market intelligence for mission projects
- Promote Human Resource Development (HRD) and Entrepreneurship in relevant research areas
- Ensure active industry participation in both technical and financial aspects to achieve mission objectives
- Provide state-of-the-art facilities for academia and industry to conduct translational work, prototyping, testing, and demonstrations
- Foster joint academia-R&D-industry collaboration to develop technologies at TRL 5–7 with sustained efforts
- Offer access to world-class facilities, equipment, and training while enabling collaborations with leading global organisations
The Mission fosters a robust industry-academia collaboration to drive innovation and achieve technology and product development goals. Image 8 shows the key highlights of such a mutually beneficial partnership include:
By focusing on indigenisation and self-sufficiency in the EV value chain, especially in terms of encouraging R&D, the mission aligns with the vision of Atmanirbhar Bharat and Viksit Bharat to produce industry-aligned translational research in Electric Vehicles, an area of national priority.
Environment Protection (End-of-Life Vehicles) Rules, 2025
The Environment Protection (End-of-Life Vehicles) Rules, 2025, notified by the Ministry of Environment, Forest and Climate Change, establish a framework for sustainable vehicle disposal in India, henceforth termed as Rules. Effective April 1, 2025, the rules apply to producers (An entity engaged in: (i) manufacturing or assembling and selling vehicles under its own brand; (ii) selling vehicles under its brand produced by others; or (iii) importing vehicles), vehicle owners, bulk consumers (consumer having ownership of more than one hundred vehicles, and includes a State transport undertaking), scrapping facilities, and testing entities, ensuring compliance with environmentally sound vehicle processing and scrappage practices. The rules exclude agricultural machinery such as tractors, trailers, and harvesters, however cover electric and battery-operated vehicles of different form factors, which is an acknowledgement of the growing demand and supply of clean mobility in India. It shall be noted that the scrapping of End-of-Life vehicles (EoLV) means scrapping of steel only from End-of-Life vehicles.
The Rules outline clear responsibilities for multiple stakeholders who are part of the ecosystem. Key provisions include an extensive understanding of extended producer responsibility. Following are some of the crucial points that various stakeholders must comply with:
What producers must do:
- Producers must fulfil the obligation of Extended Producer Responsibility (EPR) for the vehicles they have introduced in the market.
- Producers must meet scrapping targets, deploy any schemes such as buy-back scheme, deposit refund scheme or any other, furnish details of annual returns inclusive of information regarding the number and type of the vehicles (transport or non-transport), and the weight of steel used in vehicles placed in the market, including vehicles put to self-use in the previous financial year. These must be done on a centralised online portal. Based on this, the extended producer responsibility certificate will be issued. The portal will track vehicle receipt data and waste generation and facilitate the exchange of Extended Producer Responsibility certificates.
- Producers must also bring to notice any violations of the Rules.
- In case the producer stops its operations, the producer must comply with its Extended Producer Responsibility in respect of vehicles already made available in the market till the closure of operations.
- Every producer shall organise awareness campaigns and encourage customers by offering incentives to safely deposit their End-of-Life vehicles at the Registered Vehicle Scrapping Facility (RVSF) or the designated Collection Centre.
- The State Board will use the portal for registration and filing by Registered Vehicle Scrapping Facilities and bulk consumers. The portal will serve as a comprehensive data repository for all related activities. Producers may support its development.
What producers must not do:
- Producers must not engage with any entities not complying with the Rules as well as EPR.
What registered owners and bulk consumers must do:
- Every registered vehicle owner and bulk consumer must ensure their vehicle undergoes mandatory fitness testing under the Motor Vehicles Act. Once a vehicle is classified as End-of-Life, it must be deposited at a designated collection center or scrapping facility within 180 days. Keeping an End-of-Life vehicle beyond this period is prohibited. Bulk consumers must register on a centralised portal and file annual returns detailing their vehicle inventory and scrappage activities by 30th June each year.
What the Collection Centres must do:
- Collection Centres must collect, store, and transfer End-of-Life Vehicles to Registered Vehicle Scrapping Facilities while ensuring environmentally sound handling. They are required to maintain detailed records of all ELVs received, processed, and sent for scrapping.
What automated testing stations must do:
- Automated testing stations must upload details of vehicles declared unfit under Rule 182 of the Central Motor Vehicles Rules, 1989 to the centralised online portal, either directly or via integration with the government’s centralised portal.
What Registered Vehicle Scrapping Facilities must do:
- An RVSF must conduct scrapping in an environmentally sound manner. This includes de-pollution (removal of hazardous fluids and materials), dismantling and segregating waste, safe storage of different waste categories, and recycling or refurbishing materials such as plastics, metals, tyres, batteries, and e-waste, either independently or through authorised recyclers. All recovered materials must be sent to authorised recyclers, refurbishers, or co-processors. Non-recyclable materials and hazardous waste must be directed to authorised treatment facilities. Additionally, RVSFs must issue Extended Producer Responsibility certificates based on steel quantity and maintain detailed records of waste materials, recycling, and disposal activities.
Additional responsibilities by different stakeholders:
- All of these and with certain more responsibilities endowed with Central Pollution Control Board have the right to oversee the entire process, especially, maintaining an online portal for the issuance of these certificates and ensuring that producers comply with their EPR obligations. Additionally, the Board plays a key role in setting standards for ELV management, monitoring compliance, and providing necessary guidance to stakeholders.
- The State Government and the State Pollution Control Board are responsible for ensuring the implementation of the EoLV rules within their jurisdiction. The State Government oversees the establishment and functioning of collection centers, scrapping facilities, and the enforcement of compliance at the state level. The State Board is responsible for registration of bulk consumers, monitoring compliance, and ensuring that all stakeholders, including vehicle owners and scrapping facilities, adhere to the regulatory framework set by the Central Government through regular dialogues.
- Producers, Registered Vehicle Scrapping Facilities, and bulk consumers failing to comply with the EoLV Rules may face environmental compensation for damage or harm caused to the environment or public health. Compensation will be imposed by the Central or State Board, depending on the entity, after providing an opportunity to be heard. If the entity later complies, a portion of the compensation may be refunded based on the timeline of compliance.
- The Central Government may form a committee chaired by the Central Board Chairman to oversee the implementation of the End-of-Life Vehicles rules. This committee will monitor compliance, guide the development of the centralised online portal, and report to the government every six months. It will include representatives from various ministries, state boards, industry stakeholders, and other relevant parties, with the chairperson having the discretion to invite additional experts as needed.
- To note: Certain aspects such as waste batteries covered under the Battery Waste Management Rules, 2022; E-waste as covered under E-Waste (Management) Rules, 2022; plastic packaging as covered under the Plastic Waste Management Rules, 2016; waste tyres and used oil as covered under Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016 are not covered under these rules.
References:
- https://pib.gov.in/PressReleseDetailm.aspx?PRID=2036276
- https://pib.gov.in/PressReleasePage.aspx?PRID=2035601
- https://timesofindia.indiatimes.com/business/india-business/budget-2024-fm-announces-exemption-of-customs-duty-on-critical-minerals/articleshow/111952629.cms
- https://cleanmobilityshift.com/policy-regulation/union-budget-2024-key-highlights-for-indias-electric-vehicle-industry/#:~:text=The%20scheme's%20first%20phase%20
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