Govt Plans to Cut EV Subsidy Processing Time from 40 Days to 5

In a major boost to India’s electric mobility ambitions, the Ministry of Heavy Industries (MHI) is working to drastically reduce the processing time for electric vehicle (EV) subsidy claims — from the current 40 days to just five.

According to a report by Business Standard, the government aims to streamline the verification process and address technical challenges that have delayed subsidy disbursements under the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) initiative. This move is part of broader efforts to clear the mounting backlog and ensure faster payouts to EV buyers and manufacturers.

Currently, over 126,000 subsidy claims are pending for the financial year 2024-25, contributing to an overall backlog of 893,000 claims. Among these, 109,000 claims pertain to electric two-wheelers alone. Identity verification issues — mainly due to differences between buyers' current appearances and their Aadhaar photographs — have been a key reason behind the delays.

Accelerating India’s EV Shift

The PM E-DRIVE Scheme, with a financial outlay of INR 10,900 crore, is designed to push EV adoption across the country by supporting the creation of a robust EV ecosystem. Set to run from October 2024 to March 2026, the program replaces previous schemes like FAME and EMPS-2024.

The government has set ambitious sector-specific targets under its EV vision for 2030: 80% of two- and three-wheeler sales, 40% of bus sales, and 70% of commercial car sales are expected to be electric. The overall goal is to ensure that 30% of all vehicle sales in India are electric by the end of the decade.

As of December 2023, the government had disbursed around INR 5,228 crore in subsidies, supporting the sale of approximately 1.15 million EVs, according to data shared by the Ministry of Heavy Industries in the Lok Sabha.

A Growing Market and New Opportunities

India’s EV sector is poised for explosive growth. Projections suggest that by 2030, annual EV sales could hit 20 million units, creating a market worth $132 billion.

Government schemes like FAME, the Production-Linked Incentive (PLI) program, and PM e-Bus Sewa have nurtured domestic innovation, helping Indian startups gain a competitive edge. Today, India is the world’s third-largest automobile market, boasting two unicorns and four soonicorns in the EV segment.

Since 2014, over 119 EV startups have collectively raised more than $3.7 billion in funding. Companies like Ola Electric, which successfully listed last year, and Ather Energy, currently opening its IPO subscription, highlight the momentum within the sector.

Global Players Eye Indian EV Market

While India has historically protected its automobile sector through high tariffs, the government is now looking to open doors for global players — albeit under strict conditions. Plans are underway to lower import duties on premium EVs (priced above $35,000) from 110% to 15%, but only for companies investing a minimum of INR 4,150 crore ($500 million) in India and setting up local manufacturing within three years.

This shift has attracted international interest, with major players like Tesla and Indonesia’s VinFast actively exploring opportunities in India.

Driving Toward a Greener Future

Fast-tracking subsidy claims is more than just administrative reform; it reflects the government’s intent to build trust, remove operational bottlenecks, and energize India’s journey toward a greener, cleaner future.

As India ramps up its efforts, a faster, more efficient subsidy system could prove crucial in meeting its EV targets — ensuring that more Indians embrace electric mobility and that the country's EV dream accelerates smoothly into reality.