Top parliamentary panel calls for tweaks in flagship electric mobility schemes to give startups, four-wheelers a boost

NEW DELHI: The Rajya Sabha Department-Related Parliamentary Standing Committee on Industry has called for changes in the country’s flagship electric mobility schemes in a bid to boost electric vehicle sales in the country.

In the report on the demand for grants by the ministry of heavy industries for FY27 dated 11 March, the committee called for startups to be included in the ₹25,938 crore PLI-Auto scheme—as demanded by startups—and for electric four-wheelers to be incentivized under the ₹10,900-crore PM E-Drive scheme, among other recommendations.

The committee said the PLI-Auto scheme’s entry criteria—minimum global group revenue of ₹10,000 crore and fixed‑asset investment of ₹3,000 crore—may limit the participation of “emerging domestic manufacturers and EV‑focused start‑ups.”

Mint reported earlier that EV makers Ather Energy, River Mobility and Euler Motors had written to heavy industries minister H.D. Kumaraswamy to reopen the scheme’s investment window.

According to Saurav Kumar, founder and chief executive officer of Euler Motors, the recommendation on including startups is timely and important.

“The current eligibility thresholds were framed with large incumbents in mind, but they exclude serious EV startups that are investing heavily, building technology in-house and creating jobs,” he said. “Startups like us have invested more than ₹1,500 crore and generated direct employment for over 2,000 people.”

Kumar said a more inclusive PLI framework, which accounts for overall investment and not just fixed assets, would enable high-potential EV startups to contribute far more meaningfully to the country’s green mobility ambitions.

The panel recommended that electric four-wheelers be included in the PM E-Drive scheme. The scheme’s earlier iterations FAME I and II included subsidies for four-wheelers. Mint reported in 2024 that the finance ministry refused to subsidize electric four-wheelers because they were used by the affluent class and that public money should be used for the public’s benefit.

The scheme focused about 40% of its outlay on subsidizing electric buses. It also set aside funds for electric trucks and electric and hybrid ambulances, which are yet to be used.

When the PM E-Drive was launched in September 2024, only Tata Motors and Mahindra & Mahindra had an EV offering. Now, Tata Motors, Mahindra & Mahindra, Maruti Suzuki, Hyundai, and Toyota, which make up more than three-fourths of the market, have an EV in their portfolio.

Scheme extension

The panel also pushed for aid for electric two-wheelers under the PM E-Drive scheme to be extended for two more years till the end of FY28, which the industry has demanded. It said this should be done “with a calibrated tapering mechanism to avoid policy shocks in a segment that has shown strong adoption and supports large‑scale livelihood.”

India’s EV market including vehicles, chargers and other related services could generate revenue of $76 billion-100 billion by 2030, Bain and Co. said in a 2022 report. The government’s think-tank Niti Aayog in August 2025 referred to EVs in India as a $200 billion opportunity.

According to the parliamentary committee’s report, disbursals in crucial supply-side incentive schemes have been low. It raised concerns about the downward revisions of budget allocations for the PLI-Auto scheme and said repeated underutilization of funds should be avoided.

Owing to zero offtake under the ₹18,100-crore PLI scheme for batteries, the committee called for the ministry to provide a one-time extension for beneficiaries to start production and the reallocation of incentives if they are unable to meet their targets.

The committee said the ministry should review the beneficiaries of the scheme and consider “granting a one‑time conditional extension of timelines linked to clear milestones where delays are attributable to genuine systemic constraints, with provision for reallocation of unutilized capacities in persistent non‑performing cases.”

Ola Electric (20 GWh), Rajesh Exports (5 GWh), and Reliance New Energy (15 GWh) are beneficiaries of the scheme, which aims to build 50 GWh of domestic battery capacity. They did not immediately respond to queries.

Poor response

The panel said it was concerned about the lack of interest from foreign companies in the Scheme to Promote the Manufacturing of Electric Passenger Cars in India, which has remained a non-starter. The scheme offers low import duties on fully built vehicles in return for setting up manufacturing plants in India worth over $500 million.

It asked the ministry to open consultations with the industry on revised investment limits and localization requirements.

The new set of recommendations comes as sales of electric two-wheelers and electric four-wheelers fell due to a surge in petrol and diesel vehicle sales in the festive October-December quarter.

The percentage of electric cars in the market fell from 5.14% in September to 3.26% in October, although the number started to recover to 3.75% in November and 3.94% in December, retail data released by the Federation of Automobile Dealers Associations.

Among two-wheelers, the EV percentage fell from 8.09% in September to 4.56% in October before climbing to 4.59% in November and 7.4% in December.

“The Rajya Sabha Standing Committee’s nudge to electrify personal vehicles such as cars and two-wheelers is a welcome step. Incentives can certainly help narrow the upfront cost gap between electric and ICE (internal combustion engine) vehicles,” said Amit Bhatt, India managing director at the International Council on Clean Transportation.

However, he noted that subsidies alone cannot drive the scale needed for the transition and with limited public funds, it is not feasible to subsidize all vehicles.

“The more durable approach is to complement incentives with strong regulatory signals such as stringent fuel economy standards, a clear ICE phase-out roadmap, and a zero-emission vehicle sales mandate to drive investment and scale in the EV market,” Bhatt said.