India’s electric vehicle subsidies under FAME-II and state schemes represent one of the largest EV promotion efforts globally — but navigating the eligibility criteria, application process, and state-specific variations can be confusing. This comprehensive guide for 2025 covers exactly what subsidies are available, who qualifies, how to claim them, and practical tips for Indian e-bike buyers and conversion kit builders.
Table of Contents
- FAME-II Scheme: What It Covers
- FAME-II Eligibility Criteria
- State EV Subsidies: Top States 2025
- How to Claim the Subsidy
- Subsidies for DIY Conversion Kits
- GST and Road Tax Relief for EVs India
- Frequently Asked Questions
FAME-II Scheme: What It Covers
FAME (Faster Adoption and Manufacturing of Electric Vehicles) Phase II was launched in 2019 with ₹10,000 crore of central government funding, extended through 2024 and now transitioning to PM e-DRIVE (Electric Drive Revolution in Innovative Vehicle Enhancement) scheme announced in September 2024 with ₹10,900 crore allocation.
FAME-II provided direct point-of-sale subsidies applied by OEM dealers. Key subsidies relevant to Indian two-wheelers: ₹10,000–₹15,000 per electric two-wheeler (₹15,000/kWh of battery capacity, capped). This subsidy was directly reducing the purchase price at the dealer level — consumers did not need to apply separately.
Under the newer PM e-DRIVE scheme (2024–2026), subsidies for electric two-wheelers continue with approximately ₹5,000–₹10,000 per vehicle support, targeting 24.79 lakh electric two-wheelers over the scheme period.
FAME-II Eligibility Criteria
For electric two-wheelers under FAME-II/PM e-DRIVE, key eligibility requirements:
- Vehicle must be purchased from an authorised OEM that is registered under the FAME-II/PM e-DRIVE scheme
- Battery must be lithium-based (lead-acid battery EVs are not eligible)
- Made in India requirement: The vehicle must meet minimum localisation criteria set by the government (generally 50% local component by value)
- Registered and insured under the Motor Vehicles Act
- Only for first-time applicants — one subsidy per individual/entity
State EV Subsidies: Top States 2025
Delhi: Additional ₹5,000–₹22,000 per electric two-wheeler beyond central subsidy, plus first-come-first-served scheme for ₹30,000 subsidy on electric two-wheelers purchased from October 2023. Zero road tax, zero registration fees.
Maharashtra: 15% subsidy on purchase price (up to ₹25,000) for electric two-wheelers. Zero road tax. Charging infrastructure subsidy for fleet operators.
Gujarat: ₹10,000–₹20,000 per electric two-wheeler subsidy. Zero road tax and registration for EVs until December 2025. EV-friendly charging infrastructure push.
Tamil Nadu: 100% road tax exemption for EVs. Subsidy of ₹5,000–₹10,000 per two-wheeler. Green vehicle certification benefits.
Karnataka: Zero road tax + 50% registration fee waiver. ₹10,000 subsidy per two-wheeler via state scheme. Bengaluru’s BMS integration for EV fleets.
Check your state: Visit your state transport department website or contact the nodal agency (usually state energy development agency) for current active schemes — EV policy evolves rapidly and new schemes are announced frequently.
How to Claim the Subsidy
For factory vehicles: Subsidy is applied directly at dealer level as a price reduction. You pay the post-subsidy price. Dealer claims the subsidy from SMEV (Society of Manufacturers of Electric Vehicles) or the government nodal agency. No separate application needed by the buyer.
State subsidies: Some states require you to apply after purchase through the state government portal. Documents typically required: RC Book copy, purchase invoice, Aadhaar card, bank account details for NEFT transfer. Apply within the specified timeframe after purchase (usually 30–90 days).
Fleet/commercial subsidies: For fleet operators (delivery companies, e-rickshaw operators), separate higher-value subsidies are available. These require: fleet registration certificate, GST registration, proof of commercial use. Apply through the state DTC (Delhi Transport Corporation) or equivalent state agency.
Subsidies for DIY Conversion Kits
Unfortunately, FAME-II and most state subsidies explicitly exclude DIY conversion kits from subsidy benefits. Subsidies apply only to vehicles purchased from registered OEM dealers with proper homologation certificates. An individual who converts a petrol cycle to electric at home or through an uncertified workshop does not qualify for central subsidies.
However, some states have begun exploring “retrofit EV kit” certification pathways. Once certified retrofit kit providers are formally approved (expected 2025–2026 under MoRTH’s retrofit EV regulations), certified conversion kits will qualify for appropriate subsidies. Monitor your state transport department notifications for this development.
GST and Road Tax Relief for EVs India
Beyond purchase subsidies, EVs benefit from significantly reduced tax structures compared to petrol vehicles:
- GST on EVs: 5% (vs 28% + cess for petrol vehicles) — a 23+ percentage point reduction
- Road tax: Zero or heavily discounted in 20+ Indian states for EVs
- Registration fee: Zero or reduced in several states for the first registration of an EV
- Income tax benefit: Section 80EEB deduction — interest on loan taken for EV purchase deductible up to ₹1,50,000 per year
- Customs duty on EV components: Reduced to 5% for EV-specific components (motors, controllers) — lowers import cost for DIY builders
Frequently Asked Questions
Has FAME-II ended in India?
FAME-II formally concluded in March 2024. The successor scheme, PM e-DRIVE, was announced in September 2024 with ₹10,900 crore allocation for 2024–2026, covering electric two-wheelers, three-wheelers, and buses. As of early 2025, PM e-DRIVE subsidies are being rolled out.
How much subsidy can I get on an electric two-wheeler in Delhi?
Delhi combines central PM e-DRIVE subsidy (~₹5,000–₹10,000) with state Delhi EV Policy subsidy (up to ₹22,000) — potentially ₹27,000–₹32,000 total price reduction on a qualifying electric two-wheeler. Plus zero road tax and zero registration fees.
Can a student buy an e-bike with FAME subsidy?
Yes — there is no income restriction or age restriction (18+ for licensed vehicles) on FAME/PM e-DRIVE subsidies for electric two-wheelers. Any Indian citizen purchasing a qualifying vehicle from a registered OEM dealer receives the subsidy automatically at the point of sale.
Are second-hand electric two-wheelers eligible for subsidies?
No — subsidies apply to new vehicle purchases only. Second-hand EVs may have claimed the subsidy at original purchase. Buyers of used EVs do not receive purchase subsidies but still benefit from zero/reduced road tax on re-registration as an EV.
Which states offer the best total EV subsidy package in India 2025?
Delhi, Maharashtra, Gujarat, and Karnataka are consistently the most generous states for EV subsidies, combining central subsidies with state-level incentives, zero road tax, and charging infrastructure development. Tamil Nadu and Rajasthan are rapidly improving their EV subsidy programmes.
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