The Ministry of Heavy Industries (MHI) is reportedly planning to reduce the processing time for EV subsidy claims from 40 days to just five.
A Business standard report said that to execute such a move, the Centre seeks to streamline verification steps and also address technical bottlenecks.
This comes as part of the government’s initiative to clear the backlog and ensure the timely disbursal of EV subsidies under the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) initiative.
There has been a huge backlog in subsidy claims, with 126,000 currently pending for 2024-25. In total, there are 893,000 claims overall, with 109,000 for e-2Ws alone.
Such delays have been attributed to complications with face authentication, as buyers’ appearances may differ from their Aadhaar photos, causing identity verification issues.
The PM E-DRIVE Scheme is a major initiative by the MHI to accelerate the adoption of EVs and develop supporting infrastructure across the country. `
The scheme has a financial outlay of INR 10,900 CR and will run from October 2024 to March 2026, replacing earlier schemes like FAME and EMPS-2024.
The move aligns with the government’s goal of 30% of all vehicle sales to be electric by 2030. This also includes specific sectoral targets, including 80% for two/three-wheelers, 40% for buses, and 70% for commercial cars to be electric by 2030.
The government has disbursed a total of INR 52.28 Bn in subsidies to EV manufacturers as of December 2023, based on the sale of ~1.15 Mn EVs, the Ministry of Heavy Industries (MHI) previously informed Lok Sabha.
The development comes amid growing EV industry in the country, which is expected to achieve 20 Mn sales by 2030 and create a $132 Bn EV market by then.
For long, the government has adopted a protectionist approach towards its automobile sector, imposing high tariffs to promote the growth of a domestic EV ecosystem and keeping the global players at arm’s length. Moreover, global companies entering the Indian market typically did so through joint ventures with domestic players.
Meanwhile, schemes like FAME, the PLI initiatives, and PM e-Bus Sewa, among others, have helped create the requisite conditions for domestic players to thrive.
As a result, India has emerged as the world’s third-largest automobile market, producing two unicorns and four soonicorns in the EV startup segment.
In total, over 119 EV startups have raised more than $3.7 Bn in funding since 2014. These startups have also begun making their mark on Indian bourses, with Ola Electric listing last year and Ather commencing its IPO subscription process today.
However, the government is now looking at opening the market to global players under specific conditions, following growing international interest in capturing a share of the Indian EV market.
India was earlier eyeing to slash import duties on premium EVs (priced above $35,000) from 110% to 15%, but only for automakers meeting certain conditions like investing at least INR 4,150 Cr ($500 Mn) in India and setting up a local manufacturing facility within three years.
Elon Musk’s Tesla and Indonesian EV giant VinFast have been making their moves to enter the country lately.
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