Key Insight | Fiscal Support for Electric Vehicles in India: Incentives, CO₂ Abatement, and Policy Trade-offs
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The government’s push towards vehicle electrification in recent years has been driven by the need to reduce emissions from the road transportation sector. Central and state governments have been offering incentives to bridge the cost differential between electric vehicles (EVs) and conventional Internal Combustion Engine (ICE) vehicles. These incentives are in the form of purchase subsidies and concessional tax rates on vehicle sales. Given the climate consideration for offering these incentives and the fiscal cost for the exchequer to support them, it is imperative to assess the efficacy of these incentives in terms of carbon dioxide (CO₂) abatement.
This study aims to address the following research questions:
- What do the current fiscal incentives offered by the government to EVs in India translate to in terms of potential climate benefit?
- How do India’s EV incentives compare globally and with other domestic climate interventions in the country?
Shyamasis Das
Tarandeep Kaur
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The Centre for Social and Economic Progress (CSEP) is an independent, public policy think tank with a mandate to conduct research and analysis on critical issues facing India and the world and help shape policies that advance sustainable growth and development.