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Ministry Of Heavy Industries Sanctions Subsidies For 9,800 Electric Buses In Bengaluru & Hyderabad
The Ministry of Heavy Industries has sanctioned subsidies for 9,800 electric buses under the PM-E-Drive scheme in Bengaluru and Hyderabad. Bengaluru is set to receive 7,000 buses, while Hyderabad will get 2,800. This approval represents nearly 70% of the government's target to subsidise 14,028 electric buses across nine major cities by fiscal year 2026.
States are required to submit demand requests along with DDM approval to gain the Ministry's endorsement. The Ministry of Heavy Industries is now awaiting these requests from other cities. This initiative accounts for about 40% of the total budget allocation of ₹4,391 crore for electric bus subsidies.
Experts caution that electrifying public transport may face hurdles. Supply chain issues for electric bus batteries and a lack of trained personnel could emerge soon. "All buses in cities are getting electrified, but electrical bus manufacturers still rely on China for battery supply," said an expert.
When buses are tendered under the Gross Cost Contract (GCC) model, they operate with conductor control from the state's public transport authority, while the bus manufacturer provides the driver. "Drivers to operate these new electric buses need to be trained to handle the new technology that comes with electric buses," Kiran stated.
The Economic Survey 2025 highlighted China's dominance in supplying electric vehicle components and batteries as a concern. The demand for lithium-ion batteries is expected to grow at a 23% CAGR by 2030. "A shortage of alternative battery technologies strengthens China's dominance in lithium-ion batteries," said Chief Economic Advisor V. Anantha Nageswaran.
"China’s rise in the global auto market has disrupted long-standing companies in economies like Germany and Japan," Nageswaran added. This dominance creates potential dependencies for future generations due to China's control over key minerals and resources.
Public Transport Initiatives
The Economic Survey 2025 also emphasizes promoting electric vehicles through public transport initiatives. Given India's large size and land scarcity, public transport is considered an efficient form of transportation. National policies should go beyond just focusing on the shift from private vehicles and encourage its use.
Currently, only 37% of urban dwellers in India have easy access to public transport facilities, compared to over 50% in Brazil and China. To bridge this gap and reduce dependence on foreign supply chains, India needs to invest more in public transport infrastructure.
Subsidy Details & Initial Cities
The PM-E-Drive scheme offers a maximum subsidy of up to ₹20-35 lakh for one electric bus. The initial cities announced included Delhi, Mumbai, Pune, Ahmedabad, Surat, Kolkata, and Chennai. It is worth noting that the cabinet approved two schemes – PM-E-Drive and Electric Mobility – in September 2024 to facilitate the easy adoption of electric buses.
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