Is India Ready for a $200 Billion EV Breakthrough? See What NITI Aayog Says

India is standing at the crossroads of one of its most transformative shifts in the mobility space. Electric vehicles (EVs), once seen as a futuristic alternative, are now a necessity. The urgency to accelerate this transition is clearer than ever—and the stakes are high: a potential $200 billion economic opportunity.

At the heart of this new vision is NITI Aayog, which has released a pivotal report titled “Unlocking a $200 Billion Opportunity: Electric Vehicles in India”. Launched by Rajiv Gauba, Member of NITI Aayog and former Cabinet Secretary, the report signals a strategic shift from just incentives to soft mandates.

“The future of the automotive industry is electric,” said Gauba during the launch, emphasizing that India must move faster, and more decisively.

NITI Aayog: Why Soft Mandates, and Why Now?

Despite investing ₹40,000 crore over the last decade to push EV adoption, India’s EV penetration remains underwhelming—just 7.6% of annual vehicle sales, far short of the 30% target by 2030.

The report argues that incentives alone are not enough anymore. Instead, India needs "gentle mandates"—soft policy nudges that become progressively firm—to push both manufacturers and buyers in the right direction.

“We should avoid disruption, so mandates must be gentle at first but become progressively more stringent,” Gauba said.

Key Proposals: A Multi-Pronged EV Acceleration Strategy

NITI Aayog has laid out a detailed roadmap, combining policy mandates, disincentives, infrastructure plans, and R&D focus. Here are the highlights:

Zero Emission Vehicle (ZEV) Mandates

Set clear sales and production targets for EVs, starting with public fleets, urban freight, and government vehicles.

Corporate Average Fuel Efficiency (CAFE)

Expand and enforce fuel efficiency norms across broader vehicle segments.

EV Push in Public Transport

Mandate that PSUs, Defence, and State Transport Units (STUs) adopt only EV buses going forward.

Disincentives for ICE Vehicles

From higher registration fees to taxes on ICE fuels and stricter emission norms, the report urges the government to make traditional vehicles less attractive.

Model Cities First

Focus aggressively on EV saturation in metros like Delhi, Mumbai, Bengaluru, and Hyderabad before scaling nationwide.

Charging Infrastructure & Financing

Promote service-based business models for capital-heavy EVs like buses and trucks, and massively scale charging stations.

R&D and Data

Prioritize battery innovation and improve data ecosystems to better track EV performance and user behavior.

India Electric Mobility Index (IEMI): A New Benchmark

To ensure states are keeping pace, NITI Aayog has also launched the India Electric Mobility Index (IEMI)—a national ranking system that evaluates Indian states and Union Territories on 16 indicators across:

1. Transport Electrification Progress

2. Charging Infrastructure Readiness

3. EV Research & Innovation

The idea is simple: foster inter-state competition, inform local policy, and encourage best practices. This aligns with India’s larger Net Zero by 2070 vision.

India’s EV Growth: Encouraging, But Not Enough

From just 50,000 EVs in 2016, India’s total EV stock rose to 5.45 million by 2024. Annual sales grew to 2.08 million, capturing 11% of global EV sales.

But a deeper dive reveals sluggish adoption in key sectors:

• EV car sales in India have barely taken off.

• Only 6,220 electric trucks were sold in 2024—out of a total 8.34 lakh trucks.

• By contrast, China’s EV penetration is at 51% for buses and 38% for cars.

Viksit Bharat @2047: Why EVs Are Central to India’s Growth Story

NITI Aayog made it clear—EVs are not just about cleaner air or futuristic technology; they are deeply tied to India’s broader developmental goals under Viksit Bharat 2047.

“It’s not just about GDP or per capita income; it’s about a cleaner, safer environment and sustainable growth,” Gauba said.

With the automotive sector contributing 7.1% to India’s GDP, the move to electric is as much an economic necessity as it is an environmental obligation.

NITI Aayog’s latest report is more than a set of recommendations—it’s a wake-up call. India cannot afford to lag behind when China and the EU are racing ahead in the EV revolution.

By combining soft mandates with smarter financing, aggressive urban strategies, and focused state-level performance tracking, India can still catch up—and possibly even lead.

The transition won’t be easy. It needs a joint push from government, industry, startups, and financiers. But the opportunity is massive—and it’s time to drive electric, or fall behind.