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The Indian government recently approved the FAME II scheme for electric vehicles in the country. Now ahead of its implementation from the 1st April 2019, the government has tightened the localisation norms for vehicle manufacturers in the country.
According to the new and more-stringent localisation norms, every vehicle maker must ensure localisation content of at least 40 per cent for buses. While all other EV categories including two, three and four-wheelers must have localisation of at least 50 per cent.
Only after passing the above localisations norms will the vehicle makers be eligible to avail upfront incentives under the FAME II scheme. A senior government official told ET Auto, "Automobile companies have to meet the specified localisation requirements from April 1, 2019, to avail of benefits under FAME II."
As part of the FAME II subsidy for electric vehicles in India, the Indian government has allocated Rs 10,000 crores. Out of this, Rs 8,800 crores will be offered to customers to promote the utilisation of EVs in the country. This includes electric two, three and four-wheelers, as well as buses. However, even among them, only those vehicles fitted with lithium-ion batteries registered under appropriate authorities will be eligible for benefits/incentives.
The department of Heavy Industries (DHI) also stated that to further promote the use of electric vehicles and other advance technologies, incentives for vehicles will also depend on the size of the batteries used.
In order to encourage localisation, the government will increase the import duty on electric batteries to 15 per cent; from the current 5 per cent. Also, in an year's time, electric powertrains will also attract an import duty of 15 per cent.
Coming back to the allocated amount of Rs 10,000 crore, the remaining Rs 1,200 crores under the FAME II scheme will be used to develop charging infrastructure in the country. It will also be further used to create awareness among consumers regarding electric vehicles.
Thoughts On Electric Vehicles And Its Localisation In India
The FAME II Scheme once implemented in the country, will provide a big boost towards electric mobility solutions in India. The FAME II is the second phase of scheme, first introduced in 2015, with an allocation of Rs 895 crores.