The Modi government’s third FAME initiative, valued at INR 10,000 crore, would prioritize electric two-wheelers, three-wheelers, and government buses. The decision to include electric cars for institutional buyers such as taxi services remains uncertain.
The third edition of the Modi government’s flagship electric vehicle incentive program, FAME (Faster Adoption and Manufacturing of Electric Vehicles), may launch soon with a budget of INR 10,000 crore, likely within the first 100 days of the new government’s term starting next month, according to a senior official. FAME 3 would focus on electric two-wheelers, three-wheelers, and government buses, while the inclusion of electric cars, including for institutional buyers such as taxi services, is still under consideration.
The upcoming scheme reflects the previous FAME 2, which expired in March 2024, and will be submitted for approval to the Union cabinet after the new government assumes office in June. FAME 2 had provided a 15% subsidy on electric scooters. FAME 3 would continue the objectives of the Electric Mobility Promotion Scheme (EMPS), a temporary measure introduced post-FAME 2 to bridge the gap until the general elections, with an allocation of INR 500 crore to support electric two and three-wheelers until July.
The initiative aims to boost local production and sales of electric vehicles by offering demand incentives directly to consumers. Under the new scheme, companies will need fresh certification to qualify for sales incentives, which are proposed to be valid for a two-year period, a reduction from the five years under FAME 2.
While the government previously subsidized the purchase of 7,000 electric buses under FAME 2, the new scheme is expected to increase this number. However, subsidies for electric cars, even for commercial use, might not be included. Current discussions are considering whether to provide subsidies for electric cars priced under INR 15 lakh, similar to the previous scheme, and whether to extend support to hybrid cars, depending on price limits.
The government is also planning to implement new guidelines in FAME 3, requiring companies to seek re-certification to avail benefits. The temporary EMPS provides reduced incentives compared to FAME 2, offering up to INR 10,000 for electric two-wheelers and INR 50,000 for electric three-wheelers, with both receiving an additional INR 5,000 per kWh. The EMPS supports the sale of 372,215 EVs, including electric two-wheelers and three-wheelers, with incentives only available for vehicles equipped with advanced batteries to promote the adoption of cutting-edge technology.
