FAME Scheme

Imagine a government deciding that a genuinely new, unproven technology needs a financial push to reach the volume where it becomes competitive on its own, and offering a direct discount on every unit sold, specifically to get that flywheel spinning, then gradually pulling the discount back once the technology has proven it can stand on its own. FAME, Faster Adoption and Manufacturing of Electric Vehicles, did exactly this for Indian EVs.

FAME-II, the scheme's second and more consequential phase, carried a Rs 10,000 crore outlay and provided direct purchase subsidies on electric two-wheelers, three-wheelers, buses and some passenger vehicles, lowering the upfront price gap between an EV and its petrol equivalent specifically during the years that gap mattered most to a first-time buyer's decision.

The scheme's impact on two-wheelers specifically was substantial and measurable, subsidising over 16 lakh electric two-wheelers through its life, a direct, material contribution to India's e-2W sales crossing the roughly 6% penetration mark of total two-wheeler sales by 2025, a segment that barely existed in meaningful volume before FAME began.

As the segment matured, the subsidy was deliberately allowed to sunset, the Ministry of Heavy Industries set 31 March 2026 as the end date for 2W and 3W EV subsidies specifically, even as the broader PM E-DRIVE framework that succeeded FAME continues supporting buses and commercial vehicles through 2028, a signal that policymakers judged two-wheeler EVs mature enough to compete without direct purchase subsidy, while heavier, costlier categories still need more support.

Whenever an electric two-wheeler's on-road price is compared to an equivalent petrol scooter, FAME-era subsidy history is the reason that comparison has shifted so much over just a few years, a temporary policy push specifically designed to make itself unnecessary once the segment reached genuine commercial scale.