In a welcome move, the Indian government has announced that it will be increasing the budget for supporting electric vehicles in India to $ 1.3 billion or Rs. 8,730 crore under the second phase of FAME scheme. The second phase of Faster Adoption and Manufacturing of Hybrid and Electric Vehicles or FAME will commence from 1 April, 2018. The government has allocated different amounts for different purposes. For example, out of Rs. 8,730 crore, it has allocated Rs. 5,550 crore for demand-side incentives, Rs. 2,500 crore for electric buses and Rs. 1,000 crore for electric four-wheelers. Furthermore, the scheme will also earmark Rs. 600 crore for offering incentives on high-speed two-wheelers and Rs. 750 crore will be earmarked for giving incentives to high-speed three wheeler owners.
Within the FAME II scheme, the government is also offering incentives to local battery manufacturers and helping them to establish more manufacturing units in India. In fact, NITI Aayog, the government's think tank has proposed that the government remove the requirements of all permits in order to manufacture electric vehicles. This will come across as a big boost to all EV manufacturers who can finally get some relief from expensive permits which have to be renewed annually. This particular recommendation was from a report which was jointly created by the NITI Aayog and the Confederation of Indian Industries (CII). The same reports also speaks about a long tem vision for intra-city electric buses and electric two and three-wheelers as they represent a huge market for adoption of electric technology.