"The government, on various occasions, has reinforced its commitment to the cause of promoting initiatives to reduce the environmental impact of automobiles in India. Schemes like Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) under the National Electric Mobility Mission (NEMM) is the framework that defines the roadmap for electric vehicles in India.
However, India has a lot to catch up , if it wants to match the global trends. More than 2 million vehicles are already on the road across the globe. Our estimates suggest, by 2021 there will be 25 EV models available in India from the domestic, and international manufacturers.
For the companies to see a lucrative business opportunity in the long run, the upcoming finance budget FY 18-19 will be a barometer for the future direction. The sector will be keen to get a clearer picture around the development and deployment of related infrastructure – like charging stations, measures to encourage public-private partnership apart from incentives for research and development and 'Make in India'. The stand that the Finance Minister takes with respect to the Goods and Services Tax (GST) on EVs will further determine the viability. At 12 per cent currently, GST is on the higher side.
Since the government has thoughtful intentions to drive e-mobility in India, it should consider a one-time income tax deduction for consumers purchasing electric vehicles.
Apart from the income tax rebates, the Government can take special measures to promote indigenisation of components to bring down costs of EVs. In India, it is still a challenge to manufacture electric vehicles as there are certain parts like motors, lithium-ion batteries that are not available in the domestic market and have to be imported. The government should lower the import duties on such products to give the proper support and boost the adoption of electric vehicles in India."