India extends electric two-wheeler incentives

India's Ministry of Heavy Industries (MHI) has extended the terminal date for obtaining subsidy on electric two-wheelers under its PM E-DRIVE Scheme to 31 March 2028, subject to the available funding. It has also increased the total outlay of the scheme to 119 billion rupees (approx. 1.1 billion euros), with almost all of the additional funding allocated to electric two-wheelers.

MHI says that following the latest amendment, the PM E-DRIVE Scheme supports up to 4,579,120 electric two-wheelers. Compared with the previous cap of 2,479,120 units, this represents an increase of 2.1 million units, or 85 per cent.

Initially, MHI had set 109 billion rupees (approx. 989 million euros) as the total outlay of the PM E-DRIVE Scheme. Out of the additional 10 billion rupees (approx. 91 million euros) announced under the new amendment, the ministry will utilise 9.95 billion rupees (approx. 90 million euros) to fund the additional electric two-wheelers. Effectively, it has increased the allocation to electric two-wheelers under the scheme from 17.72 billion rupees (approx. 161 million euros) to 27.67 billion rupees (approx. 251 million euros).

MHI has not changed the current incentive structure. Since 1 April 2025, it has offered a subsidy of 2,500 rupees (approx. 23 euros) per kWh, capped at 5,000 rupees (approx. 45 euros) per vehicle, or 15 per cent of the ex-factory price, whichever is lower. As before, only those electric two-wheelers with an ex-factory price of 150,000 rupees (1,361 euros) or lower are eligible for this incentive.

As for the remaining 50 million rupees (approx. 454,000 euros) of the 10 billion rupees (approx. 91 million euros) added to the scheme, MHI will use it to raise the provision for administrative expenses from 500 million rupees (approx. 4.5 million euros) to 550 million rupees (approx. 5 million euros). When MHI originally announced the details of the scheme in September 2024, it said that the administrative expenses subhead would cover expenditure on knowledge partners/technical expertise, logistics support, and information, education, and communication activities.

MHI originally launched the PM E-DRIVE Scheme for the period from 1 October 2024 to 31 March 2026, subsequently subsuming the preceding EMPS-2024 scheme, which had run from 1 April to 30 September 2024. On 7 August 2025, it announced that it would extend the scheme until 31 March 2028, but excluded electric two-wheelers, as well as e-rickshaws, e-carts, and electric three-wheelers (L5 category), stating the original deadline would continue to be applicable for them.

In March 2026, MHI announced that it was extending the deadline for electric two-wheelers to 31 July 2026 and for e-rickshaws and e-carts to 31 March 2028. It also revealed that it had reached its target for subsidising electric three-wheelers (L5 category) under the scheme and thus closed that segment on 26 December 2025. With the latest amendment, the ministry has extended the deadline for electric two-wheelers also to the scheme’s final date of 31 March 2028.