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Electric Scooter/ Bike Subsidies in India
Feb 26, 2023

State-wise Electric Scooter/ Bike Subsidies in India

With rising temperatures every year, we all witness the effects of global warming. Extreme heatwaves, unseasonal rains, deadly floods, and sudden famines are some of its indicators. While global conventions and discussions are being held to tackle this problem, those solutions would take time to get fully implemented. However, there are immediate solutions that can be undertaken by you. India is one of the growing markets for electric vehicles, especially electric bikes and scooters. While a majority number of the two-wheelers you might find on Indian roads are fuel-powered, there has been a rise in the number of people switching to electric two-wheelers. To drive this initiative, the Indian government has introduced various schemes. The Electric Vehicle Policy of India is one such scheme that specifies subsidies to electric vehicle manufacturers and buyers. Given below is more information related to this policy and the subsidies offered.

What is an electric vehicle?

An electric vehicle (EV) is a type of vehicle that runs on battery power instead of fossil fuel such as petrol or diesel. In a conventional vehicle, the internal combustion engine (ICE) uses fuel to power itself and the vehicle. In EVs, electric batteries are used to power the vehicle. The engine used in EVs has zero emissions, reducing the amount of pollution generated. Fully electric vehicles and Hybrid electric vehicles are a few types of EVs.

What is the Electric Vehicle Policy of India?

As mentioned earlier, to electrify public and private transportation in India, the Indian government has laid a roadmap. Among the various things that are introduced in the Electric Vehicle Policy of India is the Faster Adoption and Manufacture of Electric and Hybrid Vehicles in India also abbreviated as the FAME scheme. Under this scheme, manufacturers, suppliers and consumers receive incentives.

What is the FAME scheme?

Launched in 2015, the FAME scheme was devised to drive the production and sales of electric vehicles in India. As the EV market in India is dominated by two- and three-wheelers, the manufacturers got heavy incentives. The first phase of the FAME scheme was launched back in 2015 and ended on 31st March 2019. The second phase of the scheme was launched in April 2019 and will end on 31st March 2024.

What are the features of this scheme?

The following were the features of the first phase:
  1. Creating demand, focusing on technology, and building the infrastructure for charging stations.
  2. During the 1st phase, 427 charging stations were installed by the government.
The following are the features of the second phase:
  1. Emphasis on the electrification of public transport.
  2. Government budget of Rs.10,000 crores.
  3. For electric two-wheelers, an incentive of Rs.20,000 each would be given for 10 lakh registered vehicles.

What is the FAME subsidy?

In the second phase of the FAME scheme, different states have provided subsidies for electric two-wheelers. Given below is the list of states that are providing subsidies on two-wheelers:
State Subsidy (per kWh) Maximum subsidy Road tax exemption
Maharashtra Rs.5000 Rs.25,000 100%
Gujarat Rs.10,000 Rs.20,000 50%
West Bengal Rs.10,000 Rs.20,000 100%
Karnataka - - 100%
Tamil Nadu - - 100%
Uttar Pradesh - - 100%
Bihar* Rs.10,000 Rs.20,000 100%
Punjab* - - 100%
Kerala - - 50%
Telangana - - 100%
Andhra Pradesh - - 100%
Madhya Pradesh - - 99%
Odisha NA Rs.5000 100%
Rajasthan Rs.2500 Rs.10,000 NA
Assam Rs.10,000 Rs.20,000 100%
Meghalaya Rs.10,000 Rs.20,000 100%
*Policy yet to be approved in Bihar and Punjab Take this example: If you want to buy an electric scooter in the state of Maharashtra, a minimum subsidy of Rs.5000 is given. So, if the cost of the scooter is Rs.1,15,000, the subsidy would bring down the cost to Rs.1,10,000. If the maximum subsidy of Rs.20,000 is given, the cost would come down to Rs.90,000.

How does this subsidy work?

Given below are the steps behind the working of the FAME subsidy:
  1. Check if the electric two-wheeler you want to buy is eligible for the FAME subsidy.
  2. You can enjoy the subsidy if the manufacturer of the scooter is registered with the FAME scheme. If they are not, you do not get any subsidy.
  3. The quota given to you would be based on the subsidy applied.
  4. The dealer from whom you purchased the scooter will forward the details of the purchase to the manufacturer.
  5. The manufacturer will forward these details to the National Automotive Board (NAB), which oversees the subsidy scheme.
  6. After all the details have been verified, the subsidy is credited to the manufacturer, who further credits it to the dealer.

How does this scheme benefit you?

Apart from the cost reduction due to the subsidy, you also get an exemption from the road tax. This helps you in further saving money. The other benefit is the affordable bike insurance for your electric two-wheeler. The prices are based on the capacity of your two-wheeler. The lower the capacity, the lower would be the premiums. You can use the two wheeler insurance premium calculator to get a quote for the two-wheeler you are looking to buy. *


The policy and the FAME scheme can benefit you and the environment when you purchase an electric two-wheeler. If you wish to know about bike insurance prices for your preferred brand, you can get in touch with your nearest insurance advisor.   *Standard T&C apply Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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