FAME III: Third phase of electric vehicle incentives to be rolled out soon, but not in the Budget

New Delhi: The third phase of the government’s incentive scheme to promote clean mobility will be announced shortly but not in the upcoming Budget, H.D. Kumaraswamy, Union minister of heavy industries, said at an event on Tuesday.

The second edition of the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles, or FAME II, scheme that ended in March had a total outlay of ₹11,500 crore. FAME III is expected to have a smaller outlay but India’s automobile industry is hoping the incentives will be maintained at ₹10,000 per electric vehicle.

FAME III may also involve an allocation of ₹2,000 crore for the development of electric mobility infrastructure such as charging networks across the country, Mint reported on 11 July, adding that the third edition of the scheme may not be a part of the Union Budget.

Also read | FAME-3 is coming; and here is what changes for EVs

The government is working to ensure that at least 30% of all vehicles sold in the country by 2030 are electric models, Kumaraswamy said at an event organised by the Society of Indian Automobile Manufacturers on skilling and employment in the EV and electric mobility sector.

The government’s initiatives are directed towards the broader environmental aim of reaching net-zero emissions by 2070 and reducing carbon emissions by 1 million tonnes by 2030, he added.

“We have come a long way but the growth has not been even,” said Dr. Hanif Qureshi, additional secretary in the Union ministry of heavy industries.

While electric three-wheelers, including e-rickshaws, are becoming popular with a penetration rate of around 50%, the rate among cars remains at around 1.8%, Qureshi said. In contrast, the US has an EV penetration rate of 11% among cars, Europe 24%, and China 36%, said Qureshi.

A mission focus on EV skilling

Kumaraswamy said the ambit of India’s Automotive Mission Plan has been expanded. 

Originally aimed at increasing the exports of automobile and auto components between 2024 and 2047, the scheme will now also involve a skilling component, aimed at matching the skills of the labour force with the requirements of the EV sector, said Kumaraswamy. 

This was decided following consultations with industry bodies such as Siam and the Automotive Component Manufacturers’ Association of India.

The ministry is curating educational and skilling programmes for graduates, post-graduates, and doctorate-level students in tandem with the Automotive Skill Development Council, said the Union minister.

Also read | Will EV charging finally get the attention it deserves in FAME-III?

“The myth that the EV industry is bad for the informal sector needs to be broken by giving education and global certificates to students so that they get jobs,” said Sudhendu Sinha, adviser in the government’s think-tank NITI Aayog, who was also at the event. 

The EV industry needs about ₹13,500 crore in investment towards skilling and employment, said Neelesh Gupta, partner, Deloitte India, who launched a report at the event on the gaps in skilling in the EV sector. 

The EV industry also needs about 30,000 new employees every year, but currently attracts only half of that, Gupta said.