In a move to curb pollution and promote the use of Electric Vehicles (EVs), the government has drafted a plan to levy a fee of Rs 12000 on the purchase of new petrol and diesel vehicles, sources say.

According to reports, the fee charged will be used to raise fund for the promotion of electric vehicles (EVs) and battery manufacturing.

Under this policy, National Institution for Transforming India (NITI) Aayog has proposed incentives of up to Rs 25,000-50,000 in first year for those buying electric vehicles, including two and three wheelers. The government think tank also proposed that government should mandate localisation with 40% Make in-India parts for e-buses and e-cars, which will be increased to 60% from april 2022.

Earlier, Prime Minister Narendra Modi had dumped a draft asking top officials to ensure that batteries of the EVs are incentivised to lower costs instead of providing rebates to auto majors. The policy will be revived with further approval from the ministry.

In order to discourage import of completely built units, the government has decided to retain the current import duty that ranges from 25-100% across various segments of the auto industry

The government had unveiled the ‘National Electric Mobility Mission Plan (NEMMP) 2020’ in 2013, to address the issues of National energy security. The scheme was launched to deal with vehicular pollution and boost the growth of domestic manufacturing capabilities.

Reiterating its commitment to the Paris Agreement, the Government of India has further planned to make a major shift to electric vehicles by 2030.

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