CBITA writes fifth petition to the parliamentary standing committee regarding FAME subsidy

In the fifth petition to the parliamentary standing committee regarding the FAME subsidy, the Centre for Business, Industry and Trade Advocacy has stated that MHI’s actions have resulted in the ‘shrinking of mass-market EVs and a spurt in sales of premium segment E-bikes.’

“The result of the coercive and non-linear actions of MHI since the onset of the mess in 2022, the actions of MHI have serially dismantled the fundamentals of India’s E-Mobility charter,” the industry body said.

Electric two-wheelers in India were set to get costlier from June 1, 2023 as the government of India revised the subsidy on the FAME India (Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India) Scheme to Rs 10,000 per kilowatt per hour (kWh) as against Rs 15,000/ kWH. Furthermore, the cap for incentive has been brought down to 15% of the two-wheeled EV’s ex-factory price as against 40% benefit extended earlier. That's a 37.5% cut, which will easily translate into higher vehicle prices. 

The MHI stopped subsidies to a dozen OEMs – which remain unpaid amounting to Rs 1,200 crore docked another four for under-invoicing; sought penalties from the four, issued notices to the others to recover past subsidies and all this while being unmindful of what it was doing to the sector and its own targets, the letter stated.

In the letter, it stated that the FAME II policy has become an enabler of the exact opposite intent of the policy - an elitist program, neglecting the principles of inclusivity and accessibility.

Just yesterday, the SMEV has also written to the Niti Aayog to review the FAME II policy, adding that triple whammy of blocking subsidy, claw back notices, and embargo on future sales are sabotaging the FAME II policy.