Quick Highlights:
- ₹6,559 crore demand incentives reimbursed to EV OEMs under FAME-II.
- EV adoption rose from 0.71% in FY20 to 7.50% in FY25.
- 16.7 lakh EVs sold and 6,862 e-buses sanctioned under the scheme.
- Government launches PM E-DRIVE, PLI Auto, ACC Battery and e-Bus Sewa schemes.
Introduction
India’s transition to clean mobility received a decisive push through the FAME-II Scheme, which played a pivotal role in accelerating electric vehicle adoption, strengthening domestic manufacturing, and expanding charging infrastructure across the country. With the scheme concluding on 31 March 2024, the Ministry of Heavy Industries has released comprehensive data highlighting its economic, industrial, and environmental impact.
The FAME-II Scheme not only reduced upfront EV costs for consumers through demand incentives but also laid the foundation for a resilient domestic EV supply chain. Backed by phased manufacturing requirements, reimbursement mechanisms for OEMs, and complementary policy frameworks, the scheme has become a cornerstone of India’s electric mobility journey.
This article analyses the FAME-II Scheme impact, EV adoption growth, charging infrastructure expansion, and the government’s next phase of initiatives, including PM E-DRIVE, PLI schemes, and long-term energy planning through nuclear power expansion.
Also Read: India Crosses 39,000 Public EV Charger Installations under PM E-DRIVE
What Was the FAME-II Scheme?
The Faster Adoption and Manufacturing of Electric Vehicles (FAME-II) Scheme was designed to promote electric mobility through financial incentives, infrastructure support, and manufacturing localization. Under the scheme:
- Customers received upfront purchase price reductions on EVs
- Incentives were reimbursed to OEMs by the Government of India
- Priority was given to mass-market EVs and public transport electrification
A total ₹6,559 crore in demand incentives was reimbursed to EV manufacturers during the scheme’s lifecycle, ensuring affordability while maintaining industry liquidity.
EV Adoption Growth Under FAME-II Scheme
One of the most significant outcomes of the FAME-II Scheme was the sharp rise in EV market penetration.
- EV adoption increased from 0.71% in FY 2019–20
- Adoption reached 7.50% in FY 2024–25
This tenfold growth reflects growing consumer confidence, improved product availability, and supportive government policies. As of 31 March 2025, the scheme supported the sale of 16,71,606 electric vehicles, spanning two-wheelers, three-wheelers, cars, and buses.
The FAME-II Scheme also sanctioned 6,862 electric buses, accelerating electrification of public transport and reducing urban emissions.
Also Read: VinFast Announces Tamil Nadu Factory Expansion for Electric Buses and Two-Wheelers
Charging Infrastructure Expansion Across States
Charging infrastructure was a critical component of the FAME-II Scheme, addressing one of the biggest barriers to EV adoption.
According to Oil Marketing Companies including IOCL, BPCL, and HPCL, a total of 751 EV charging stations were sanctioned and installed in Karnataka alone under the scheme.
Nationally, thousands of charging stations were sanctioned, supporting inter-city and urban EV usage. This infrastructure push helped improve range confidence and enabled fleet electrification for public and commercial transport.
Strengthening Domestic EV Manufacturing
Beyond consumer incentives, the FAME-II Scheme emphasized self-reliance through a mandatory Phased Manufacturing Programme (PMP). This policy required:
- Progressive localization of EV components
- Reduction in import dependence
- Development of a robust local supply chain
As a result, India witnessed increased investments in EV manufacturing, component production, and battery technology. The scheme contributed to both direct and indirect employment generation, expanding opportunities across engineering, assembly, electronics, and services.
Government’s New EV and Manufacturing Schemes
Building on the success of the FAME-II Scheme, the Ministry of Heavy Industries has launched several forward-looking initiatives to strengthen supply chain resilience and manufacturing competitiveness.
Production Linked Incentive Scheme for Automobile and Auto Components (PLI-Auto)
Approved on 15 September 2021, the PLI-Auto Scheme has a budgetary outlay of ₹25,938 crore. The scheme focuses on:
- Advanced Automotive Technology (AAT) products
- Minimum 50% Domestic Value Addition (DVA)
- Large-scale investment in EV and auto manufacturing
This initiative aims to position India as a global hub for next-generation mobility technologies.
PLI Scheme for Advanced Chemistry Cell (ACC) Battery Storage
Approved on 12 May 2021, the PLI-ACC Scheme has an outlay of ₹18,100 crore and targets:
- Establishment of 50 GWh ACC battery manufacturing capacity
- Domestic production of lithium-ion and advanced batteries
- Strengthening energy storage for EVs and renewable integration
Battery localization is a critical pillar supporting EV cost reduction and long-term sustainability.
Also Read: India's EV market has potential to reach ₹20 Lakh Crore by 2030: Nitin Gadkari
PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme
The PM E-DRIVE Scheme, notified on 29 September 2024, marks the next phase of EV demand incentives. With an outlay of ₹10,900 crore, the scheme runs from 1 April 2024 to 31 March 2028.
Key features include incentives for:
- Electric two-wheelers and three-wheelers
- Electric ambulances and trucks
- Electric buses
The scheme also supports:
- Charging infrastructure development
- Upgradation of vehicle testing agencies
- Mandatory Phased Manufacturing Programme (PMP) for EV components
For e-2Ws and e-3Ws, the terminal date is 31 March 2026.
PM e-Bus Sewa – Payment Security Mechanism (PSM) Scheme
Notified on 28 October 2024, the PM e-Bus Sewa-PSM Scheme has an outlay of ₹3,435.33 crore. Its primary objective is to:
- Support deployment of over 38,000 electric buses
- Provide payment security to e-bus operators
- Reduce financial risk arising from PTA payment defaults
This scheme is expected to accelerate adoption of electric buses in urban and semi-urban regions.
Scheme for Promotion of Manufacturing of Electric Passenger Cars in India (SPMEPCI)
Notified on 15 March 2024, SPMEPCI aims to attract global and domestic investments in electric passenger car manufacturing.
Key requirements include:
- Minimum investment of ₹4,150 crore
- 25% DVA by the end of the third year
- 50% DVA by the end of the fifth year
The scheme reinforces India’s ambition to become a global EV manufacturing destination.
Nuclear Energy and India’s Clean Power Mix
Alongside electric mobility, India continues to strengthen clean electricity generation through nuclear power.
- Nuclear energy accounts for about 3% of total electricity generation
- Nuclear share in FY 2024–25 stood at approximately 3.1%
The slow expansion in earlier decades was attributed to technology denial regimes, international embargoes, and limited resources.
Despite operating the sixth-largest nuclear reactor fleet globally, India’s installed nuclear capacity is currently 8.78 GW (excluding RAPS-1).
Nuclear Capacity Expansion and 2047 Vision
With indigenous 700 MW PHWR technology now mature and international cooperation on 1000 MW reactors, nuclear capacity is set to rise to 22.38 GW by 2031–32.
Further, the Government has announced a Nuclear Energy Mission targeting 100 GW capacity by 2047, aligning with India’s long-term clean energy and net-zero goals.
Policy Shift: Private Sector Participation in Nuclear Energy
Currently, FDI in atomic energy is prohibited under existing policy. However, the Government is proposing amendments to the Atomic Energy Act, 1962, to enable private sector participation.
This proposed reform could unlock capital, innovation, and advanced technology, accelerating nuclear power deployment alongside renewable and EV-driven electricity demand.
FAQs
What was the total incentive reimbursed under the FAME-II Scheme?
A total of ₹6,559 crore was reimbursed to EV OEMs as demand incentives.
How many EVs were supported under the FAME-II Scheme?
The scheme supported the sale of 16,71,606 electric vehicles as of March 31, 2025.
What replaced the FAME-II Scheme?
The PM E-DRIVE Scheme replaced FAME-II, offering incentives from April 2024 onward.
How many EV charging stations were installed in Karnataka under FAME-II?
A total of 751 charging stations were sanctioned and installed.
What is India’s nuclear power capacity target?
India aims to achieve 100 GW nuclear capacity by 2047.
Conclusion
The FAME-II Scheme stands as a landmark policy that transformed India’s electric mobility landscape. By combining consumer incentives, manufacturing localization, and infrastructure expansion, it enabled rapid EV adoption and laid the groundwork for a sustainable automotive ecosystem.
With new initiatives such as PM E-DRIVE, PLI-Auto, ACC Battery PLI, and e-Bus Sewa, the government is reinforcing its commitment to clean mobility and industrial self-reliance. Complemented by long-term nuclear energy expansion, India is aligning transportation electrification with reliable clean power generation.
Together, these policies position India firmly on the path toward energy security, emission reduction, and global leadership in electric mobility.
