 "GoI may roll out FAME-III subsidies with Budget 2024, auto industry hopes for Rs 10,000 crores")
The Government of India is considering the introduction of a third iteration FAME subsidies in the upcoming budget and is expected to be presented next month, believe industry exports.
FAME, for those who are unaware, is essentially a scheme to encourage the sale of electric vehicles (EVs).
The new phase of the Faster Adoption & Manufacturing of Electric Vehicles scheme is anticipated to support electric two, three, and four-wheelers with a proposed budget allocation of around Rs 10,000 crore, as reported by sources familiar with the deliberations to the Economic Times.
A senior official also confirmed to ET that discussions are in progress and that FAME III could be announced in the full budget.
The heavy industries ministry, which oversees the scheme, has already forwarded a plan for approval to the Prime Minister’s Office (PMO). Another official noted that the final decision on the proposal will be made closer to the budget announcement, considering the fiscal situation.
The scheme’s continuation is seen as crucial to increasing the number of electric vehicles on Indian roads, aligning with the government’s focus on green mobility as part of its broader strategy to reduce dependence on carbon fuels.
The proposed policy will include measures to verify the manufacturing capacity of companies seeking subsidies, addressing issues of abuse seen in previous iterations.
The FAME scheme was initially launched in 2015 with an outlay of Rs 5,172 crore. Its second phase, FAME II, was announced in 2019 with Rs 10,000 crore in budgetary support and is set to continue until March 31, 2024.
Impact Shorts
More ShortsMeanwhile, the government introduced the Rs 500 crore Electric Mobility Promotion Scheme (EMPS) 2024 to subsidize two and three-wheelers. This scheme provided incentives of up to Rs 10,000 per electric two-wheeler and up to Rs 50,000 per electric three-wheeler, although these subsidies have been scaled down to less than half of what was offered under FAME II.
Support for electric four-wheelers was completely omitted under EMPS, which aimed to support the sales of 333,387 electric two-wheelers and 38,828 three-wheelers. EMPS sops were shared only with companies that already had established local manufacturing capacities, which is a major shift from FAME I
II’s phased manufacturing programme (PMP) aimed at progressively increasing local EV manufacturing capabilities. Additionally, the EMPS scheme was extended only to vehicles equipped with advanced batteries to prevent mishaps.
As India continues to push for greater adoption of electric vehicles, the potential introduction of FAME III highlights the government’s ongoing commitment to fostering a greener, more sustainable transportation sector.
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