The environment surrounding electric vehicles (EVs) in India is changing dramatically. There is a noticeable shift toward bringing domestic EV regulations into line with international Free Trade Agreements (FTAs) as the nation steps up efforts to meet its climate goals under the Nationally Determined Contributions (NDCs) and its 2070 net-zero target. This strategic connection points to a larger vision—where sustainability initiatives, international trade, and clean mobility converge.
Changing the Framework for Domestic EV Policy
India’s EV policy environment has changed significantly in recent years. By providing incentives that increase customer demand, important programs like the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) plan have been vital. To increase domestic production on the supply side, the government has implemented Production-Linked Incentive (PLI) programs, namely for the production of automotive components and advanced chemistry cell (ACC) batteries. In order to encourage the use of electric mobility, a number of state governments have also implemented their own EV policies, combining non-financial and financial incentives.
India Fortifies EV Drive with New Schemes and Global Investment Strategy
In March 2024, India made a significant leap in electric mobility by initiating the Electric Mobility Promotion Scheme (EMPS), which was later merged into the large-scale PM E-Drive initiative. This step assured sustained incentives for EV demand after FAME-II wrapped up. In addition to this, the government launched a number of tenders for building out the nation’s EV charging network, underlining a wider change in policy from simply encouraging the take-up of EVs towards creating a strong and competitive supply chain for essential components like batteries, motors, and power electronics.
At the same time, the Indian government launched the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI), which would boost domestic production of EVs. The scheme is meant to draw major international investments and make India a primary contender in global EV manufacturing. Foreign manufacturers are permitted under SPMEPCI to import 40,000 electric vehicles during a span of five years at a concessional duty rate of 15% if they invest a minimum of $500 million and achieve phased milestones in domestic value addition. Such a strategic plan not only enables foreign investment but also improves India’s indigenous manufacturing base.