Different State Tariffs and Incentives are Creating an Uneven EV Market, Industry Says

India needs greater consistency in electric vehicle policies across states as differences in power tariffs, incentives and approval processes make it harder to expand EVs and the infrastructure needed to support them, industry executives said.

While the central government has stepped up support for electric vehicle manufacturing and adoption, implementation on the ground continues to vary widely between states. This is creating pockets of higher EV adoption instead of allowing the market to develop evenly across the country, executives said during a panel discussion at the ICCT India Clean Transportation Summit 2026.

Jayesh Shelar, Chief Marketing Officer at Blue Energy Motors, pointed to wide variations in electricity tariffs and EV incentives between states as one of the problems facing electric commercial vehicles.

“The consistency in policy is also going to drive, right, the ease of implementation,” Shelar said. “Consistency in policies across is going to help this spread because India is geographically diverse and has various economic centres spread throughout the geography.”

He said electricity tariffs can differ sharply between regions even as state-level incentives also vary.

According to Shelar, one western state, despite having among the higher electricity tariffs, offers a strong incentive for electric vehicles and accounts for about 75% of the electric heavy trucks registered in India. He did not name the state.

The example, he said, shows how incentives and other state policies can influence where EV investments and adoption take place.

The issue is particularly important for electric commercial vehicles because energy cost has a direct bearing on their total cost of ownership. Fleet operators typically base purchase decisions on the initial acquisition price as well as operating costs over the life of the vehicle.

Shelar also compared India’s fragmented electricity tariff structure with China, where he said power costs are more consistent across regions.

“China is one of the leading countries in the world for electric adoption today,” he said. “And if you look at, in China, the electricity cost across the country is the same.”

He said rules governing net metering and open access also vary between Indian states, making the business case for charging and renewable-energy projects different from one location to another.

Charging infrastructure faces approval hurdles

The policy challenge goes beyond electricity prices.

Gowri Natarajan, Head of Public Policy and Strategic Partnerships at Yulu, said companies trying to build charging and battery infrastructure often have to deal with several government departments for land, electricity connections and other permissions.

“We’re not thinking through what happens once these vehicles are on the road,” Natarajan said.

She said even basic issues such as acquiring land or securing the appropriate electricity tariff can take months as companies move between different government bodies.

The problem can be particularly difficult where ownership or control of land is split between multiple public authorities.

Natarajan cited Delhi as an example, saying a location near a Metro station may appear suitable for EV infrastructure, but the land may actually belong to another government body. Private operators are then required to coordinate separately with different agencies.

She called for a single-window system for EV infrastructure approvals, with one government agency taking responsibility for coordinating permissions across departments.

“Instead of expecting the private entity to be jumping from one office to another… the government agency driving EV adoption should be the one helping the entity with any government-related approval,” she said. “There has to be a single window.”

Natarajan said similar problems are not confined to smaller cities and can emerge even in major EV markets such as Delhi and Bengaluru.

Infrastructure risks falling behind vehicle growth

The executives warned that India’s focus on manufacturing and vehicle incentives will have limited impact if charging and battery infrastructure cannot expand at a similar pace.

Natarajan said India could succeed in producing large numbers of electric vehicles but still struggle to reach adoption targets if operators find it difficult to set up the infrastructure needed to keep those vehicles running.

“While we might have great vehicles on the road, we might be able to manufacture an immense number of electric vehicles. But what happens to these vehicles when they need to be charged?” she said.

She also pointed out that EV penetration remains concentrated in a relatively small number of states and cities.

Unless demand expands geographically, domestic manufacturers may also find it harder to achieve the scale needed to compete globally, she said.

The panel’s comments underline a shift in the challenges facing India’s EV market. The early policy focus was largely on reducing the cost of buying electric vehicles and encouraging domestic manufacturing. As volumes grow, however, electricity availability, charging infrastructure, land access and coordination between government agencies are becoming increasingly important.

For commercial vehicles, where downtime and operating costs directly affect fleet profitability, inconsistencies between states could have an even larger impact.

Shelar said India will need to account for its regional differences, but greater consistency could make EV deployment easier and help ensure that adoption does not remain concentrated in only a few markets.

“I think policies need to be consistent to give equal opportunity for the sector to come up,” he said.