Plugging Into The Future

In the last few months, if there is one sector that has benefited from the largesse that policymakers can sometimes bestow on industries, it is the nascent electric vehicle (EV) industry in India. For long all that this industry got from the government was mere lip service even as the world moved ahead and charted a course. That has changed now.

First came the expansion of the Faster Adoption and Manufacturing Hybrid and Electric Vehicles (FAME) Scheme, the umbrella policy to encourage electrification of mobility in India, in March. The corpus of this scheme was increased more than 10 fold to Rs 10,000 crore for three years (fiscals 2020 22) from just Rs 895 crore for four years (fiscals 2016 19) in its first edition. Then, in her maiden Budget, Finance Minister Nirmala Sitharaman announced a slew of incentives, including income tax deduction on interest on loan on EVs, lower import duty on many components, and investment linked income tax exemption for setting up manufacturing facilities for solar electric charging infrastructure and lithium storage batteries. Another booster dose came in the form of GST reduction on EVs from 12 to 5 per cent on July 27.

While these incentives are expected to expedite automakers into launching more EVs in the country, this thrust on electrification has opened up a new business area of EV charging infrastructure, which is attracting numerous companies from very diverse backgrounds. The potential size of this emerging business vertical is significant. According to a