Electric Vehicle Subsidy in India in 2026

To promote the use of electric vehicles and reduce dependence on fossil-fuel-powered vehicles, the Indian government launched an electric vehicle subsidy policy. This policy aims to increase awareness of the benefits of electric vehicles. Under this policy, subsidies are offered to attract more people to purchase electric vehicles.

If you are looking to purchase an electric vehicle, do not forget to purchase electric vehicle insurance along with it. Let us know more about vehicle subsidy in India and the benefits offered under it.

What is the Electric Vehicle Subsidy in India?

To electrify public and private transportation in India, the Indian government laid out a roadmap. Under one of the government subsidy policies on electric vehicles in India, the FAME scheme was launched. It stands for Faster Adoption and Manufacture of Electric and Hybrid Vehicles in India. Under this scheme, manufacturers and suppliers get incentives.

What is the FAME Scheme?

Launched in 2015, the FAME scheme was devised to drive the production and sales of electric vehicles in India. To promote the growth and sales of electric bikes, cars, and commercial vehicles, manufacturers received significant incentives. The 1^st phase of the FAME scheme was launched back in 2015 and ended on 31^st March 2019. The 2^nd phase of the scheme was launched in April 2019 and ended on 31^st March 2024.

What is the FAME subsidy?

In the 2^nd phase of the FAME scheme, different states provide subsidies for electric vehicles. Given below is the list of states providing subsidies on electric scooters and bikes:

Given below is the list of states providing subsidies on cars and SUVs:

What Electric Vehicle Subsidy in India Can You Get in 2026?

After the FAME scheme, now if you are planning to buy an electric vehicle in 2026, you might be asking: “What subsidy can I still claim, and has the deadline changed?” The good news is that the government has extended incentives under its other PM E-DRIVE scheme, but the benefits now vary by vehicle type and timeline.

For electric two-wheelers, the subsidy in 2026 is as follows:

1. For electric two-wheelers, subsidies remain available until July 31, 2026, according to a Mint report.

2. The incentive amount that you can get now is ₹2,500 per kWh, capped at ₹5,000 per vehicle.

3. You can claim this, provided the ex-factory price stays within ₹1.5 lakh.

4. For instance, if you purchase an electric scooter with a 2 kWh battery, you may be eligible for a subsidy of up to ₹5,000.

Furthermore, for e-rickshaws and e-carts, the subsidy in 2026 is as follows:

1. For e-rickshaws and e-carts, the subsidy window extends much longer, until March 31, 2028.

2. These vehicles offer higher incentives: ₹2,500 per kWh, with a maximum benefit of ₹12,500 per vehicle from FY26 onwards.

3. The scheme also caps the eligible vehicle price at ₹2.5 lakh.

It is important to note that both categories come with fixed limits on the number of vehicles eligible for subsidies. This means the electric vehicle subsidy in India can be maximised by making an early purchase.

Electric Vehicles and Insurance

While the government is heavily promoting the Electric Vehicle Policy in India, there is a lower awareness when it comes to electric vehicle insurance. Due to the build and the technology used in the vehicle, it is important to insure your electric vehicle with an insurance policy.

For example, if you purchase an electric car and it gets damaged in an accident, the cost of the repairs could cause you a huge financial burden. Especially if a major component of the car were to get damaged.

1. Insuring your car with electric car insurance means not having to worry about the cost of repair.

2. Similarly, if your electric bike were to get damaged in floods and its functionality is affected, it could result in a total financial loss for you. However, your electric bike insurance can ensure that you are financially compensated in the event of total damage caused to your vehicle*. So, always get two wheeler insurance renewal done.

3. If you own an e-rickshaw and it causes damage to a third-party vehicle and injures someone, the cost of repair and medical treatment would have to be borne by you.

Having your commercial vehicle insured by electric commercial vehicle insurance means not only is the third-party compensated for the damage caused to their vehicle, but also, any person who is injured is compensated for the medical treatment as well*.

Conclusion

In 2026, the electric vehicle subsidy in India will still reduce upfront costs but come with strict timelines. Electric two-wheeler benefits end by July 31, 2026, while e-rickshaws continue until 2028. Due to incentive limitations, buying early helps you maximise savings and take full advantage of the scheme.

With these subsidies, you do not have to think more than once to purchase an electric vehicle. And you can enjoy the financial protection offered under Bajaj General electric vehicle insurance.

Frequently Asked Questions on Electric Vehicle Subsidy in India

How does battery capacity affect your EV car subsidy in India?

The EV car subsidy in India directly depends on battery size, as incentives are calculated per kWh, up to a fixed maximum per vehicle.

Is there a price limit to avail of EV subsidies?

Yes, vehicles must be priced at or below a maximum ex-factory price to qualify, ensuring the scheme targets affordable EV options.

What happens when the government exhausts the electric scooter subsidy quota in India?

Once the allocated number of vehicles reaches its limit, you will not receive any subsidy, even if the deadline has not passed.

Can you combine the central electric scooter subsidy in India with state benefits?

Yes, in many cases, you can combine the central and state electric scooter subsidy in India, which can further reduce the overall cost of your EV.

Are EV subsidies available for personal and commercial use?

Yes, subsidies apply to both personal electric scooters and commercial vehicles, such as e-rickshaws, depending on eligibility.

**Standard T&C apply Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

**Claims are subject to terms and conditions set forth under the motor insurance policy.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions.

Disclaimer: Vehicle specifications, features, and pricing may vary, and it is essential for readers to verify the latest information from authorised dealerships, manufacturers, or reliable sources before making any purchasing decisions.