The government has allocated a total budget of ₹6,421.33 crore for development of automobile industry that includes ₹2,671.33 crore as a liability for Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicle in India (FAME–India) scheme.

Out of the total amount of ₹6,421.33 crore, as per the budget estimates (BE), the government has allocated ₹3,500 crore for the production linked incentive (PLI) scheme for automobiles and auto components in FY25. National Programme on Advanced Chemistry Cell (ACC) Battery Storage is allotted ₹250 crore

The Ministry of Heavy Industries (MHI) in March launched the Electric Mobility Promotion Scheme (EMPS) – 2024 to provide further impetus to the green mobility and development of electric vehicle (EV) manufacturing ecosystem in the country. The duration of the scheme was for four months — April 1 till July 31, 2024 — with an outlay of ₹500 crore, with restricted number of vehicles. It was limited to 3,33,387 electric two wheelers (with outlay of ₹333.39 crore); 13,590 e-three wheeler (e-Rickshaw/ e-cart) with an outlay of ₹33.97 crore; and 25,238 units of e-three wheeler: L5 (cargo) with an outlay of ₹126.19 crore, the MHI said.

“The subsidies for demand incentive are eligible for e-2w and e-3w sold and registered until the funds are available or the number of vehicles supported reaches the maximum number defined category-wise or until July 31, 2024, whichever comes first,” the MHI explained.

Meanwhile, the proposed exemption in customs duty on import of lithium, cobalt and other rare minerals in the Budget is also likely to lower the battery production cost and help in making EVs more affordable for the buyers, veterans in the auto industry said.

“Exemption of Customs Duty on import of Lithium, Cobalt and other rare minerals and extension of concessional Customs Duty on Li-Ion Cells till March 2026; and Withdrawal of Equalisation Levy of 2 per cent on e-transactions. These announcements would continue to propel growth of the Indian Auto Industry,” Vinod Aggarwal, President, Society of Indian Automobile Manufacturers (SIAM), said.