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EV Policies & Government Schemes

Stay updated on incentives that can save you ₹1-3 Lakhs

Last updated: April 2026

Central Government Schemes

PM E-Drive Yojana (Oct 2024 – Mar 2026, rolled forward)

Replaced FAME-II with a ₹10,900 Cr outlay. Demand incentives for e-2W, e-3W, e-buses, e-ambulances and e-trucks. Charging infra budget ₹2,000 Cr. Personal 4W NOT covered directly — only via state policies. Scheme operationally extended into FY27 pending FAME-III / successor notification.

PLI Scheme for Auto & ACC Battery

₹25,938 Crore allocated for Advanced Chemistry Cell (ACC) battery manufacturing in India, boosting domestic production and reducing EV costs long-term.

Green Mobility & GST Benefits

EVs enjoy reduced GST of 5% compared to 28% + cess for ICE vehicles. EVs are also exempt from permit requirements, making commercial use easier.

Income Tax Benefit (Section 80EEB)

Additional deduction of up to ₹1.5L/yr on interest paid on EV loans sanctioned under Section 80EEB. Original window closed Mar-2023 for new loans; pre-sanctioned loans continue to claim through FY27. Budget 2026 signalled intent to reinstate — track FY26-27 Finance Bill.

Central incentives applicable to your EV purchase

  • ·GST 5% on EVs vs 28% + cess on ICE — saves ₹1-3L on-road depending on segment.
  • ·Section 80EEB ₹1.5L interest deduction on EV loans (pre-sanctioned loans; reinstatement signalled).
  • ·PLI ACC battery manufacturing ₹25,938 Cr driving domestic cell production and medium-term price decline.
  • ·Concessional import duty 15% on CBU EVs priced ≤ US$40,000 (subject to local investment commitment) — enables more global models.
  • ·PM E-Drive charging infra ₹2,000 Cr for public fast-charging network expansion.
  • ·No permit requirement for commercial EVs — lowers operating entry cost for fleets.

FAME-III signals & PLI Auto localisation (what's coming)

  • - FAME-III / successor scheme: MoHI signalled a ₹15,000+ Cr successor in early 2026; 4W personal segment likely re-introduced with stricter localisation (Domestic Value Addition > 50%) and capped to mass-market price bands (≤ ₹15L).
  • - PLI Auto Component scheme: ₹25,938 Cr payout tied to Deemed-Eligible-Vehicle (DEV) classification. OEMs meeting DVA 50% get direct incentive on incremental sales.
  • - AIS 156 Phase 2: battery safety norms fully enforced on all new homologations — expect new launches from 2026 onward to reflect stricter thermal propagation testing.
  • - NITI Aayog EV roadmap 2030: 30% EV sales target across segments; state-level EV shares to be tracked quarterly via VAHAN dashboard.

Signals based on MoHI / NITI Aayog public statements and Budget 2026 announcements; final scheme notification pending.

India EV Policy Strength (April 2026)

Simplified geographic grid. Hover / tap a state for its top incentive.

Not to scale
J&K / Ladakh — Central scheme only. Central scheme onlyJKHimachal Pradesh — Partial benefits. Road tax waiver; limited subsidyHPPunjab — Partial benefits. Road tax waiver; no 4W subsidyPBUttarakhand — Central scheme only. Road tax waiver onlyUKChandigarh — Active strong incentives. Rs 5,000/kWh subsidy + ICE capCHHaryana — Active strong incentives. Rs 1.5L slab-linked subsidyHRDelhi — Active strong incentives. Rs 1.5L + 100% road tax + reg waiverDLUttar Pradesh — Active strong incentives. Rs 1L subsidy + 3yr road taxUPBihar — Central scheme only. Central scheme onlyBHAssam / NE — Active strong incentives. Rs 10k/kWh (first 2,500 buyers)ASRajasthan — Active strong incentives. Rs 10k/kWh + SGST reimbursementRJMadhya Pradesh — Partial benefits. Road tax waiver; no 4W subsidyMPJharkhand — Central scheme only. Central scheme onlyJHWest Bengal — Partial benefits. Road tax waiver; public transport focusWBGujarat — Announced, limited operational. Rs 1.5L subsidy — limited/delayed disbursalGJChhattisgarh — Announced, limited operational. Draft policy under consultationCGOdisha — Active strong incentives. Rs 1L flat subsidy (extended 2026)ODMaharashtra — Active strong incentives. Road tax waiver; toll exemption (no personal 4W subsidy)MHTelangana — Active strong incentives. Rs 10k/kWh up to Rs 1.5LTSAndhra Pradesh — Active strong incentives. Rs 10k/kWh (first 10k units)APGoa — Active strong incentives. Rs 1.5L subsidy (extended)GAKarnataka — Active strong incentives. Rs 30k subsidy; 2026-31 draft policyKATamil Nadu — Active strong incentives. 100% road tax; manufacturing hubTNKerala — Active strong incentives. 50% road tax + dedicated EV tariffKL
Active strong incentives
Partial benefits
Announced, limited operational
Central scheme only

Sources: State transport department notifications and gazette updates verified through April 2026. Several state schemes operate via extensions past original sunset dates. Verify locally before purchase.

State-wise EV Policies

Click on a state to see full policy details. Many schemes operate via silent extensions past their original sunset dates.

Active Limited Expired

Policies are reviewed monthly or whenever a state DTPC, Transport Department, or DISCOM circular materially changes EV incentives. Last full sweep: 2026-04. See the editor runbook and npm run check:policies for the refresh workflow.

ICE vehicle policy changes (impact your running cost)

The other side of the coin — regulation is quietly pushing up ICE TCO

BS6 Phase 2 / RDE (Apr 2023)

Real Driving Emissions testing fully enforced. OEMs priced petrol/diesel ICE up 3-8% and real-world efficiency fell marginally. Already baked into 2023+ ex-showroom prices.

CAFE-III fleet CO2 norms (active 2027)

CO2 target tightens to ~91 g/km. OEMs are repricing through 2026 and steering small petrols toward mild/strong hybrids. Expect small petrol hatchbacks to become relatively more expensive.

E20 ethanol-blended petrol (mandatory in 12+ states)

Retail petrol now sold as 20% ethanol blend in most major states. Real-world kmpl drops 3-6% on petrol vehicles, directly raising fuel cost per km. Watt2Buy applies a 4% default penalty where city has E20 enforced.

15-yr / 10-yr scrappage policy

NCR and several state capitals enforce 15-year private petrol / 10-year diesel deregistration. Adds a 2-8% terminal-value drag on ICE resale. Applied in Watt2Buy city data for Delhi, Gurugram, Mumbai, etc.

Green Tax (up to 50% of road tax)

Levied on ICE vehicles older than 8 years in ~15 states at re-registration. Effective multiplier on ICE road tax of 1.1x-1.5x depending on city. Applied via the `green_tax_multiplier` field in Watt2Buy.

NCR diesel cap / commercial ICE bans

Delhi NCR, Bengaluru and Mumbai enforce bans or caps on commercial diesel. Shrinks the resale buyer pool for older ICE commercial vehicles, compounding the scrappage drag.

Watt2Buy models these factors via optional city-level fields — e20_enforced, scrappage_terminal_drag, green_tax_multiplier — with safe defaults so existing comparisons are not altered retroactively.

How to Claim Benefits

Step-by-Step Process

  1. 1Purchase an eligible EV from an authorized dealer
  2. 2Collect invoice with GST details and vehicle information
  3. 3Register the vehicle at your local RTO
  4. 4Submit subsidy claim through the state portal (if applicable)
  5. 5Receive subsidy amount via Direct Benefit Transfer (DBT)

Documents Needed

  • ✓Aadhaar Card (for identity verification)
  • ✓Vehicle Registration Certificate (RC)
  • ✓Bank account details (for DBT)
  • ✓Original purchase invoice from dealer
  • ✓Form 20/21 from RTO (vehicle registration)
  • ✓Proof of address (if different from Aadhaar)

Policy Updates Timeline

Mar 2026

PM E-Drive Yojana original window ends; rolled into FAME-III successor signals

Upcoming

Apr 2026

CAFE-III (fleet CO2) priced in by OEMs; hybrid uptick expected

Upcoming

Mar 2025

Maharashtra purchase subsidy lapsed; road tax waiver extended via circular

Oct 2024

PM E-Drive Yojana launched (₹10,900 Cr) — replaced FAME-II

Apr 2023

BS6 Phase 2 / RDE fully enforced; ICE prices up 3-8%

Mar 2024

FAME-II ended

Disclaimer: Policy information is compiled from public sources and may not reflect the latest changes. Subsidy availability depends on budget allocation and may be exhausted. Always verify with the respective state transport department or official government portal before making purchase decisions.

See How Policies Affect YOUR Comparison

Watt2Buy automatically factors in your state's subsidies and tax benefits into the TCO calculation.

Compare with Subsidies Applied
Watt2Buy — India's transparent EV vs ICE Total Cost of Ownership calculator