Indian market for electric vehicles to become more attractive through new regulations

4. March 2021

Ahead of upcoming deliberations on the Indian state government’s annual budget, the Society of Manufacturers of Electric Vehicles (SMEV) has urged Finance Minister Nirmala Sitharaman to revamp the FAME subsidy program. The association said to either revise the upcoming Phase 2 of FAME or reintroduce Phase 1 of FAME. The budget of the FAME 2 incentive program is the equivalent of about $1.37 billion, is for a three-year period and was introduced on April 1, 2019. Phase 2 is an extension of the FAME 1 India program, which came into effect on April 1, 2015 with a sum of $123 million. The acronym FAME stands for “Faster Adoption and Manufacturing of Hybrid and Electric Vehicles.”

 

 

In addition, it hopes to see a reduction in VAT for electric vehicles. SMEV Chairman Sohinder Gill also wrote, “For a young and fragile industry like electric vehicles, which is also heavily dependent on government subsidies, there is a need for an effective strategy to support the market. The electric vehicle industry is still behind its target figures.”

The plan was to support 1 million electric two-wheelers, 500,000 three-wheelers, 55,000 passenger cars and light commercial vehicles, and 7,000 buses. The SMEV argued that FAME 2 needs to be more attractive for customers because conditions, especially for two-wheelers, need to be made affordable for the mass of the population despite subsidies. To support the Indian automotive industry, the deadline for subsidy applications to manufacture components for electric vehicles has been extended for the second time to April 1, 2021.

The relevant technical automotive standards, called Automotive Industry Standards or AIS for short, apply to Indian manufacturing locations. The process of AIS certification according to the Indian AIS (Automotive Industry Standard) can be challenging and complex. We will be pleased to support you in the AIS certification process and are also available to answer any questions you may have.

AIS stands for Automotive Industry Standards, the technical automotive standards for India, while TAC stands for Type Approval Certificate. This kind of automotive product certifiation is conducted by authorities like the International Center for Automotive Technology (iCAT).

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