The Indian government, in collaboration with the Ministry of Road Transport and Highways (MORTH), is taking strict action against electric scooter manufacturers found guilty of violating subsidy norms under the Faster Adoption and Manufacturing of Electric Vehicles (FAME II) scheme. The move comes after investigations revealed that several companies had wrongfully claimed subsidies, leading to financial discrepancies in the government’s incentive program.
Government’s Response to Violations
Authorities have issued recovery notices totaling nearly ₹500 crore to seven electric vehicle (EV) manufacturers, including Hero Electric, Okinawa Autotech, Ampere EV, Revolt Motors, Benling India, Lohia Auto, and AMO Mobility. These companies allegedly failed to meet local sourcing requirements necessary to qualify for government incentives. As a result, the government is considering banning them from availing subsidies in the future and blocking incentives on vehicles sold over the last 15 months.
A senior government official stated that legal action is also under consideration, as some companies have not responded to the notices. While Revolt Motors has offered to refund the amount, others have yet to comply. The Ministry of Heavy Industries (MHI), which oversees the FAME II scheme, is discussing the matter with other departments before finalizing penalties, as the decision could impact investments in the EV sector.
Impact on the EV Industry
The crackdown on erring companies is expected to reshape the electric two-wheeler market, ensuring stricter compliance with subsidy regulations. The government aims to protect consumer interests and maintain transparency in the EV subsidy framework. Companies found guilty may face disqualification from future incentives, which could affect their pricing strategies and market competitiveness.
Meanwhile, manufacturers that have adhered to the guidelines are expected to receive their pending subsidies soon. Reports indicate that ₹200 crore has already been disbursed, with the remaining claims set to be cleared by the end of the month.
Looking Ahead
The Indian government’s decisive action underscores its commitment to promoting ethical business practices in the EV sector. As the country pushes for sustainable mobility, ensuring compliance with subsidy norms will be crucial in fostering a fair and transparent ecosystem for electric vehicle adoption.
This development signals a strong regulatory stance, reinforcing the government’s vision for a cleaner and more accountable EV industry in India.