A decade ago, spotting an electric vehicle on Indian roads required the keen eye of an automotive enthusiast and considerable luck. Today, electric two-wheelers weave through traffic in every major city, electric buses ferry commuters across metropolitan routes, and charging stations dot highways where only petrol pumps once stood. This dramatic transformation hasn’t emerged from market forces alone—it’s been meticulously engineered through visionary government interventions that simultaneously drive consumer adoption and build domestic manufacturing capability.
The FAME I and FAME II schemes, alongside the Production-Linked Incentive programme, represent India’s comprehensive blueprint for electrifying mobility whilst establishing the country as a global EV manufacturing hub. “Our goal is not just EV adoption but also the creation of a robust domestic supply chain, from battery production to final vehicle assembly,” declares Bhupathiraju Srinivasa Varma, Minister of State for Steel and Heavy Industries, articulating an ambition that extends far beyond environmental objectives into industrial strategy and economic sovereignty. The question is whether India can execute this dual mandate successfully.
The FAME Architecture: Subsidising the Transition
The Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles scheme has functioned as the cornerstone of India’s EV policy architecture since its inception. FAME I, launched in 2015, pioneered the approach by providing purchase incentives for electric and hybrid vehicles whilst supporting nascent charging infrastructure development. This initial phase established proof-of-concept that government intervention could meaningfully accelerate EV adoption in a market dominated by petrol and diesel vehicles. FAME II, implemented from 2019 to 2024 with a substantially expanded budget of ₹11,500 crore, broadened both scope and ambition, providing targeted subsidies across vehicle categories—two-wheelers, three-wheelers, four-wheelers, and electric buses—whilst simultaneously expanding charging infrastructure deployment.
The results speak to the scheme’s effectiveness. As of June 2025, FAME II has supported over 1.6 million electric vehicles, with the distribution revealing interesting adoption patterns: 1.4 million two-wheelers dominate, reflecting urban commuters’ embrace of electric scooters and motorcycles; 165,000 three-wheelers demonstrate the commercial viability of electric auto-rickshaws for last-mile connectivity; 22,000 four-wheelers indicate gradual but growing passenger car adoption; and 5,165 electric buses showcase public transport electrification. Beyond vehicle subsidies, the scheme has facilitated installation of over 8,885 public charging stations, addressing the infrastructure chicken-and-egg problem that typically constrains EV adoption. This network ensures EV owners have access to reliable charging infrastructure, progressively eliminating range anxiety that has historically deterred potential buyers. The FAME schemes essentially de-risked the EV transition for both manufacturers and consumers, creating market conditions where electric mobility could flourish.
Manufacturing Sovereignty Through Production Incentives
Whilst FAME addresses demand-side challenges, the Production-Linked Incentive scheme tackles supply-side imperatives with equal vigour. The automotive-focused component of the PLI scheme is catalysing unprecedented growth in EV manufacturing, powertrain component production, and associated research and development capabilities. This isn’t merely about assembly—it’s about establishing comprehensive manufacturing ecosystems that capture value across the entire production chain. The PLI Advance Chemistry Cell scheme specifically incentivises local production of battery cells, arguably the most critical and valuable component in electric vehicle manufacturing. Batteries typically represent 30-40% of an EV’s cost, meaning domestic battery production dramatically improves cost competitiveness whilst reducing dependence on imported cells.
These incentives are strategically designed to encourage local assembly and manufacturing, ensuring India doesn’t simply become a consumption market for EVs produced elsewhere but emerges as a significant global production hub. The schemes mandate adherence to a Phased Manufacturing Programme that progressively increases local value addition requirements, preventing manufacturers from merely importing knocked-down kits for basic assembly. This phased approach gives manufacturers time to establish supply chains and production capabilities whilst ensuring genuine indigenisation of EV production. The requirements extend beyond final assembly to encompass motors, controllers, battery management systems, and other critical components, fostering a deep and resilient domestic supply chain. The PLI scheme essentially offers manufacturers a compelling proposition: invest in India’s EV production ecosystem and receive substantial financial incentives that improve return on investment whilst accessing the world’s third-largest automotive market.
Building Momentum for Global Competitiveness
The combined impact of FAME and PLI schemes has been transformative, though challenges persist. EV adoption has surged beyond initial projections, with over 1.6 million vehicles supported under FAME II representing exponential growth from the pre-scheme baseline. The establishment of a robust charging network across the country addresses the practical infrastructure concerns that previously limited EV viability for long-distance travel. Perhaps most significantly, the PLI scheme has attracted substantial private investment into EV manufacturing, with both domestic automotive giants and international manufacturers establishing or expanding Indian production facilities.
This investment is fostering a domestic supply chain increasingly capable of meeting both domestic demand and positioning India as an export hub for global markets. Companies are establishing battery cell manufacturing facilities, motor production units, and component suppliers specifically to serve India’s growing EV ecosystem whilst eyeing export opportunities. As India continues expanding its EV ecosystem, these government initiatives will prove crucial in determining whether the country merely participates in the global EV revolution or emerges as one of its principal architects. The transition from policy announcement to operational excellence requires sustained commitment, adaptive refinement as market conditions evolve, and continued investment in both adoption incentives and manufacturing capabilities. The foundation has been laid; the superstructure’s construction has begun in earnest.