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FAME I & II subsidy scheme (and the absent FAME III)
What it is
Faster Adoption and Manufacturing of Hybrid and Electric Vehicles - the demand-incentive regime that preceded PM E-DRIVE. FAME I ran from 2015; FAME II from 2019 with an outlay raised from Rs 10,000 cr to Rs 11,500 cr
It supported ~16 lakh EVs and funded 9,332 public charging points, then lapsed in Mar 2024 and was bridged by the short-lived EMPS 2024 before PM E-DRIVE took over
Impact on industries
- Built the electric two- and three-wheeler market from near zero, establishing the volumes, supply chain and dealer familiarity the current scheme now runs on
- The defining lesson is subsidy dependence - the e-2W incentive fell from 40% to 15% of ex-factory price in 2023, forcing a price reset each time
- Localisation conditions triggered claw-backs and withheld payments, showing subsidy revenue is contingent and auditable rather than earned
- The FAME-EMPS-PM E-DRIVE sequence leaves the industry planning in 12-18 month policy windows, discouraging long-cycle capital commitment