Introduction
The Federation of Indian Chambers of Commerce & Industry (FICCI), a highly influential non-governmental trade organization in India, has recently submitted a detailed and comprehensive proposal to the Ministry of Heavy Industries, Government of India. The essence of this proposal is to strongly advocate for the continuation of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) Scheme. The primary objective underlying this proposition is not merely the continuation but the strategic enhancement of the FAME Scheme to ensure sustained and incremental growth in the adoption of electric vehicles (EVs) throughout the nation. The strategy simultaneously aims to decrease the notable cost differential between electric cars (EVs) and conventional internal combustion engine (ICE) vehicles. Subsidies and other financial incentives will be properly planned and implemented to achieve this significant aim.
Why Extend the FAME Scheme?
In light of the impending conclusion of the current FAME II iteration, scheduled to conclude in March 2024, FICCI puts forth a compelling argument urging the Ministry of Heavy Industries to consider a substantial extension of the FAME scheme, encompassing the next five years. The organization underscores a critical concern - a sudden cessation of the FAME scheme may potentially result in a noteworthy 25% escalation in the upfront prices of EVs. This abrupt spike in costs could have the unintended consequence of not only stalling but potentially reversing the ongoing momentum in the adoption of electric vehicles across India. By extending the FAME Scheme, a more gradual and phased approach to the transition can be maintained, ensuring a smoother trajectory for both consumers and the automotive industry.
The Current State of EV Penetration
Presently, the electric vehicle penetration rate in India stands at a modest 5%. In light of this, FICCI highlights how critically important it is to expand the FAME programme in order to support the audacious national goal of reaching a 30% EV adoption rate by 2030. The proposal covers a wide range of topics, including infrastructure development, consumer awareness, and technology improvements. It goes into great detail on the potential and challenges that the EV industry is currently facing. In addition, it highlights how well the FAME policy has worked to stimulate business investments in the electric vehicle industry, supporting other significant government programmes like the 'Make in India' campaign. FICCI hopes to create a stronger environment that promotes innovation, research, and development in the field of electric vehicles by expanding the FAME Scheme.
Supportive Statements from FICCI's Chair, Ms. Sulajja Firodia Motwani
Ms. Sulajja Firodia Motwani, the distinguished Chair of the FICCI EV committee, provides insightful and detailed commentary on the proposal. Her remarks delve into the nuanced successes and challenges experienced during the implementation of FAME II, specifically highlighting the program's positive impact in reducing the upfront prices of EVs. By extending the FAME Scheme into its third iteration (FAME III), Ms. Motwani envisions not just the continuation but the refinement and expansion of demand incentives. This strategic approach, detailed in the proposal, is deemed critical for effectively bridging the persisting price gap between electric vehicles and their ICE-powered counterparts. It also aims at ensuring the sustained interest and engagement of consumers in the electric vehicle market. Ms. Motwani's statement elucidates the potential for FAME III to serve as a catalyst for continued market growth, fostering a symbiotic relationship between the automotive industry, consumers, and the overarching goal of sustainable and eco-friendly transportation solutions.