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EV industry wants incentives and tax rationalisation from budget
Industry News- Jul 15,24
India's EV industry is hoping for the introduction of the FAME- III scheme, allocation of funds for public charging infrastructure, incentives for localising components, and a reduction in GST on EVs.
With Finance Minister Nirmala Sitharaman set to present the Union Budget 2024 on July 23, India's electric vehicle (EV) sector is eagerly anticipating announcements that could drive industry growth, the source reported.
India's EV industry is hoping for the introduction of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India (FAME) - III scheme, allocation of funds for public charging infrastructure, incentives for localising components, and a reduction in GST on EVs.
Aryaman Tandon, Managing Partner, Praxis Global Alliance for the Mobility sector, told the source, “The industry hopes the FAME scheme will expand to include private buses and commercial vehicles (CVs), which have so far been limited to State Transport Undertakings (STUs). Reducing customs duties on imported EV components and supporting local R&D in battery technology, as seen in the last budget, will further accelerate local manufacturing and create jobs.”
Nimish Trivedi, Founder & CEO, Evera, noted that EV adoption increased by 48% in 2023, primarily due to government subsidies like FAME-II. The FAME Scheme, initially introduced in 2015, aims to promote electric and hybrid vehicle adoption in India and has completed two terms: FAME-I and FAME-II.
Mukesh Taneja, CEO and Co-Founder, GT FORCE, added, “We expect the government to consider reducing GST rates on EV components and batteries from the current 18% to 5%. This tax rationalisation would help offset potential price increases resulting from the conclusion of subsidy programs and keep EVs affordable for the masses.”
The call for these reforms comes amid a global slowdown in electric vehicle sales. India's EV two-wheeler market saw a 27% drop in registrations in May compared to the previous year, according to a Mint report. This prompted Bhavish Aggarwal, Founder and CEO, Ola Electric, to urge EV companies to focus more on product development and supply chain management rather than marketing.
Capital costs and a shortage of rapid-charging stations are major factors contributing to the slowdown in EV demand worldwide, as highlighted by a Goldman Sachs report.
The EV industry in India is optimistic that the Union Budget 2024 will address these challenges and introduce measures that will foster growth and sustainability in the sector.
(Source: HT & ANI)
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