India Approves Subsidy For 5,595 Electric Buses Across 64 Cities

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The Indian government has sanctioned subsidies for around 5,600 electric buses across various cities under the Faster Adoption and Manufacturing of Hybrid & Electric Vehicles in India, or the FAME-II scheme.

Image: BYD

The Department of Heavy Industries of the Indian government announced that it approved disbursal of financial subsidies for the deployment of 5,595 electric buses across 64 cities in the country, for inter-city transportation and last-mile connectivity for the Delhi Metro Rail Corporation.

The department had received 86 proposals for the deployment of almost 15,000 electric buses. The proposals were finalized on the basis of pre-defined conditions stated by the department in an expression of interest document issued in June.

The largest number of buses have been sanctioned for the state of Maharashtra. Led by Mumbai with 300 approved buses, the state shall receive a subsidy for a total of 725 buses. Bengaluru, Delhi, and Ahmedabad are the other three cities for which 300 electric buses each have been approved. A subsidy for the deployment of 600 buses in the state of Uttar Pradesh has been sanctioned. Gujarat and Tamil Nadu shall receive funding for the deployment of 550 and 525 electric buses, respectively. Each of the 64 cities shall have at least 25 electric buses each.

A total of 5,095 electric buses have been sanctioned for deployment under the subsidy scheme across 64 cities. Additionally, the subsidy has also been sanctioned for 400 buses for inter-state transport. Eight state transport corporations have secured approval for deployment of 50 buses each under the scheme. Finally, 100 electric buses have also been approved for deployment by the Delhi Metro Rail Corporation to support and complement last-mile connectivity for the country’s largest metro rail network.

We had covered a story in June explaining the various parameters for the approval of projects under the FAME-II scheme and timeline for disbursal of subsidies.

The government claims that these electric buses would run around 4 billion kilometers (2.5 billion miles) during the contract period, saving 1.2 billion liters (7.5 million barrels) and offsetting 2.6 million tonnes of carbon dioxide emissions.

In addition to the EoI for electric buses, the department also issued an EoI for electric charging stations. It has asked for proposals for setting up 1,000 charging stations each with at least six charging points using all major charging standards apart from the domestic Bharat standard. 

The FAME-II scheme has a budgetary allocation of Rs 10,000 crore (US$1.4 billion). The government had allocated Rs 2,500 crore (US$360 million) to subsidize 5,000 electric buses; this amount could likely increase given the sanction of around 600 additional buses. The government also disburses subsidies on the purchase of commercial vehicles under this scheme, and so far more than US$ 50 million worth of subsidies have been disbursed for the purchase of over 280,000 vehicles.

This scheme is part of the Indian government’s push to promote electric mobility in the public transportation sector. We recently reported that the government may ban the sale of three-wheelers using internal combustion engines by March 2023 and all two-wheelers using internal combustion engines with less than 150 cc by March 2025, and that cab aggregators like Uber and Ola Cabs may be required to have at least 40% electric vehicles in their fleet by 2026.

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An avid follower of latest developments in the Indian renewable energy sector.

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