Industrial Subsidy for EV & Automotive Startups in India

The Indian government is rapidly pushing toward clean energy and sustainable mobility. To support this shift, both the Central and State Governments offer industrial subsidies for EV & Automotive Startups. These subsidies include cash grants, tax waivers, concessional loans, and infrastructure support to reduce startup costs and accelerate growth in the EV manufacturing ecosystem.

Subsidies make it easier for new entrepreneurs to launch EV businesses, set up factories, build charging networks, and develop advanced batteries. Let’s explore how these industrial subsidies are transforming India’s EV and automotive startup ecosystem.

Central Government Incentives for EV Startups

The Government of India has launched several key programs to strengthen the electric vehicle ecosystem and local manufacturing base.

1. FAME-II (Faster Adoption and Manufacturing of Electric Vehicles)

Launched under the Ministry of Heavy Industries, FAME-II had a ₹10,000 crore budget to encourage EV adoption across India.

• Targets included 10 lakh e-two-wheelers, 5 lakh e-rickshaws, 55,000 electric cars, and 7,000 e-buses.
• Subsidy offered:
  • ₹10,000–₹15,000 per kWh for e-scooters (up to ₹45,000).
  • ₹25,000 for electric autos and up to ₹1.5 lakh for fleet cars.
• ₹800 crore was allocated to develop 7,432 public charging stations nationwide.

This program made EVs affordable for buyers and profitable for startups to manufacture locally.

2. PLI (Production-Linked Incentive) Scheme

The PLI scheme provides cash incentives on incremental production for EVs, batteries, and auto components.

• ₹26,000 crore for EV and hydrogen vehicles.
• ₹18,100 crore for Advanced Chemistry Cell (ACC) batteries.
• Startups like Ola Electric received approvals for 20 GWh battery production under the PLI scheme.

This initiative promotes “Make in India” by rewarding domestic production and export-oriented EV manufacturers.

3. PM-eBus Sewa & PM-EV Drive

These schemes are part of India’s clean transport vision:

• PM-eBus Sewa (2023) – funding 10,000 e-buses with ₹20,000 crore.
• PM-EV Drive – provides subsidies to charging infrastructure developers.
  Additionally, EVs attract only 5% GST, compared to 28% on petrol/diesel vehicles, helping manufacturers and buyers both.

4. SPMEPCI (2024 Policy)

Approved in March 2024, this new scheme promotes EV car manufacturing in India with investment-linked incentives for setting up plants and R&D centers.

State-Level Subsidies for EV Startups

Apart from central schemes, many Indian states have designed their own EV policies to attract startups and investors.

Uttar Pradesh

• ₹5,000 per kWh (max ₹7,500) for e-scooters.
• ₹30,000 flat for personal electric cars.
• Dedicated UP EV subsidy portal for easy application.

Gujarat

• ₹10,000 per kWh on e-two-wheelers (up to ₹1.5 lakh).
• Up to ₹15 lakh for 4-wheelers.
• 25% capital subsidy (up to ₹10 lakh) for new public chargers.
  Gujarat’s EV policy encourages local manufacturing and green infrastructure.

Bihar

• ₹10,000 subsidy on the first 10,000 e-bikes.
• 75% rebate on motor vehicle tax.
• Up to ₹1.5 lakh for electric cars.
• Support for charging station setup through Bihar EV Policy 2023.

Punjab

• 100% waiver on stamp duty and electricity duty for 10 years.
• Full SGST reimbursement for local EV sales.
• Employment incentives: ₹48,000/year for women or SC/ST workers, ₹36,000/year for men.

Himachal Pradesh

• Road tax and toll charge exemption for EVs till 2027.
• 100–200 acres of land reserved for EV industrial parks at concessional rates.

West Bengal

• ₹1.5 lakh subsidy on EVs priced up to ₹15 lakh.
• Concessional electricity tariff (~₹6/kWh) for charging stations.
• Skill centers and research grants for EV innovation.

Other Leading States

• Delhi: Up to ₹30,000 subsidy on 2W and road tax waiver.
• Karnataka: EV manufacturing incentives and retrofitting programs.
• Tamil Nadu: Industrial parks for EVs and battery units.
• Maharashtra: Focus on battery production and green factories.

Each state has its own eligibility criteria and application portal, encouraging startups to set up in regions aligned with their business model.

Eligibility Criteria for Subsidies

To apply for subsidy on EV & automotive startups industry, you must:

1. Be a registered Indian company or MSME.
2. Manufacture EVs, components, or batteries locally.
3. Meet technical norms (e.g., advanced battery certification under FAME).
4. Have a valid project report and DPR for PLI or state schemes.
5. Register vehicles or units within the state (for state-level benefits).

Women-led or SC/ST-owned startups may receive additional financial support under select policies like Punjab’s employment subsidy.

Success Stories

• Ola Electric: Received PLI approval for 20 GWh battery capacity to build India’s largest EV cell factory.
• Ather Energy: Partnered with DPIIT in July 2025 to promote EV innovation.
• Hero Electric, Revolt, TVS, and Okinawa: Benefited from demand subsidies under FAME-II.

These success stories prove how industrial subsidies are fueling India’s EV revolution.

How StartupFlora Guide EV Startups?

Navigating subsidy programs can be complex. StartupFlora, a business consultancy, helps startups access government benefits through:

• Eligibility assessment and DPR preparation.
• Documentation and online application submission.
• Coordination with government departments for approvals.

With over 94% client satisfaction, StartupFlora makes the funding process smooth and transparent for EV & Automotive Startups seeking financial support.

Frequently Asked Questions (FAQs)

1. What are the major subsidies for EV & Automotive Startups in India?

Main subsidies include FAME-II (for vehicle purchase), PLI (for manufacturing and batteries), and state-level EV policies (tax and capital support).

2. How to apply for EV startup subsidies?

Applications can be made through the Department of Heavy Industries portal for FAME, respective ministries for PLI, or state portals like UP or Gujarat EV portal.

3. Are there special benefits for women or SC/ST entrepreneurs?

Yes. For instance, Punjab offers higher employment subsidies for women/SC/ST workers. National programs like Stand-Up India and Startup India’s Women Entrepreneurs initiative also support women-led startups.

4. Which states offer the best EV startup subsidies?

Delhi, Gujarat, Karnataka, Tamil Nadu, and Maharashtra offer top-tier incentives including capital subsidies, tax waivers, and infrastructure support.

5. Can startups receive subsidies for exporting EV parts?

Direct export subsidies don’t exist, but startups benefit from PLI, RoDTEP, EPCG, and SEZ incentives that indirectly promote export growth.

6. How to track subsidy approvals?

For FAME, use the official FAME India portal by entering your vehicle registration or VIN. For PLI or state incentives, updates are sent via official communication from the respective ministry or department.

Conclusion

The industrial subsidy on EV & Automotive Startups industry is a game-changer for India’s sustainable future. With combined central and state-level incentives, entrepreneurs can lower costs, attract investors, and scale faster. Whether you’re planning to set up a battery unit, EV assembly plant, or charging infrastructure, now is the perfect time to leverage these schemes and StartupFlora can guide you every step of the way.