of Indian Chambers of Commerce and Industry (FICCI), an association of business
organisations has recommended measures to enhance demand
for electric vehicles by including the continuation of the FAME -II scheme till
FICCI EV Committee submitted recommendations
to the government to seek immediate support from policymakers to enhance
attractiveness for these vehicles in the short term and to encourage continued
investments in the sector, stated a release.
These recommendations are submitted to NITI
Aayog, the Department of Heavy Industry, Ministry of Road Transport and
Highways and other relevant authorities in the government.
FICCI has also requested the government to urgently
take measures to prevent derailment of the sector and to help create demand, so
that India can attain leadership in EV technology and sales.
"As demand and investments in the
electric vehicles (EVs) sector are severely hit due to disruptions caused by
COVID-19, FICCI has suggested to the government, a series of measures to ensure
continuity of the EV growth road map and achievement of the targets as
envisioned by the government for the sector in the next decade," pointed
out the FICCI release.
The industry body is however apprehensive
about the adverse impact of introduction of this green technology due to
factors such as reduction in demand for automobiles, higher risk aversion among
customers towards new technology, disruption in supply chain, among others.
"There is also a likelihood of
reduction in demand for shared mobility leading to reduced demand for electric
three-wheelers and postponement of investments in EV technology by local
component makers," FICCI stated.
Despite these short term setbacks, India
must continue to encourage EVs along with all other electrified vehicle
technologies, such as plug-in hybrid electric vehicles, strong hybrid electric
vehicles (EVs) and fuel cell electric vehicles.
This would also be in line with the
country's long-term vision towards electric mobility to lessen air pollution,
achieve fuel security and technology leadership in this sector, FICCI said.
FICCI has sought continuation of FAME
(Faster Adoption and Manufacturing Â of Hybrid and Electric Vehicle)-II scheme
for two more years to 2025, along with short term 'booster incentives' under
the scheme for 12 months to enhance demand.
"This should be done within the
overall existing budget allocation of Rs 10,000 crore for FAME II. This booster
incentive will help create demand for EVs in the short run and continue
momentum," it said.
Besides, FICCI has sought extension of
subsidy support for electric two-wheelers and electric three-wheelers with
swappable battery to encourage EV ecosystem. The move will also encourage
states to finalise EV policies considering all electrified vehicle technologies.
FICCI has also recommended that retail
financing for EVs should be made part of priority sector lending, for higher
financing availability by banks to these vehicles.
The other recommendations include a review
to improve the e-buses procurement criteria and scheme design under FAME II
with industry consultation to promote e-buses, as well as a Rs 10 crore support
towards setting up in-house R&D infrastructure to come up with
Make-in-India product and develop advanced technology for EV two-wheelers.
Shekar Viswanathan, Chairman, FICCI EV
Committee and Vice Chairman and Whole Time Director, Toyota Kirloskar Motors,
stated, “Worldwide, the automobile sector is undergoing transformation with
various technologies and it is essential that India is also a part of this
change and take a leadership role. Therefore, for innovative and vibrant
industry and to attract investments for newer technologies, it is necessary
that the government policies are technology agnostic."
The key national objective to be met is the
reduction of carbon emission. Just as the government has wisely introduced BS
VI fuel ahead of time, India must encourage all those technologies that will
progressively reduce carbon footprint, he said.
Palash Roy Chowdhury, Co-chair, FICCI EV
Committee said, "The country should outline a clear nationwide policy to
phase out old - pre-BS-IV ICE vehicles being used in public transport."
FICCI has also sought formulation of a
policy to incentivise all major e-commerce players to convert their last-mile
delivery operations to all-electric by 2025, in a staggered manner.
Under this policy a set of pilot cities
(with most pollution and urban congestion) can be selected with a time-bound
policy road map to mandatorily phase out polluting public transport vehicles,
"The road map should be designed to
incentivise vehicle conversion/migration to environmentally sustainable electrified
vehicle technologies starting with the lowest capital impact category, such as
2/3-wheelers, followed by public transport buses and then 4-wheeler
taxis," he added.