As per the Budget document, INR 2,671.33 crore has been allocated for the scheme, compared to INR 4,807.40 crore in the preceding year. Incidentally, this year's allocation is almost the same as that of 2022-23; in FY23, the government had allocated INR 2,402.51 crore towards the FAME scheme.
As expected, Sitharaman has not announced the FAME III scheme. Notably, Union Minister HD Kumaraswamy had previously mentioned that the FAME III scheme is being finalized based on recommendations from relevant ministries, though the exact implementation date has not been specified.
Commenting on the Budget Akihiro Ueda, CEO of Terra Charge India, said, "The 2024 Budget has continued to support the EV industry which is a great incentive for manufacturers but I still look forward to the measures that will enhance the growth, address the supply chain problems, and promote sustainable mobility. The highlight of this budget is the complete exemption from customs duties on lithium which is a key component in EVs. Additionally, the government is promoting more job creation in the manufacturing sector which will directly impact around 30 lakh youth and I am very sure that all the skilled workers will help in raising the EV market growth in India. However, I feel that the government should focus on the GST rates that are implied on the raw materials, reducing the GST on this will release the stress from the manufacturers which will automatically benefit the customers."
Prashant Vashishtha, Chairman and Managing Director (CMD) of Sokudo Electric India, said the reduction in custom duty will lower the price of EVs making them more affordable and accessible to all.
"The cost reduction on custom duties on EV components will help the EV manufacturers which will further benefit to the customers. According to the recent development in the budget if custom duties on lithium-ion batteries are reduced by 10% it will release the burden on the manufacturers by reducing the overall cost of production. Moreover, this initiative aligns with the government’s vision of promoting sustainable transportation solutions across the nation. Additionally, the fall in EV prices will lead to demand for the adoption of electric vehicles across India, contributing to a cleaner environment and also reducing the dependency on fossil fuels," he added.
In the Interim Budget, Finance Minister Nirmala Sitharaman allocated INR 2,671.33 crore specifically for the FAME scheme.
To accelerate the transition to green mobility, the government initiated the FAME scheme, which offers incentives for purchasing electric vehicles.
The first phase of the FAME scheme, launched on April 1, 2015, was intended to last two years but was extended until March 31, 2019. During this period, INR 529 crore was allocated under FAME 1.0 and was fully utilized.
Phase two of the FAME scheme was launched on April 1, 2019, with a budget of INR 10,000 crore for three years. A significant portion, 86%, was allocated for demand incentives to promote electric vehicle adoption in the country.
The second phase of the FAME scheme, known as FAME II, officially ended on March 31, 2024, after operating since 2019. Under FAME II, the Indian government provided a total subsidy of INR 11,500 crore, benefiting both electric vehicle manufacturers and consumers.
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