NITI Aayog Pushes From Subsidies to Soft Mandates to Accelerate EV Adoption in India

NITI Aayog, India’s top policy planning body, is pushing for a major change in the country’s electric vehicle (EV) strategy. Instead of continuing heavy subsidies, it now recommends introducing “soft mandates”, a policy approach that gradually requires the use of EVs in certain sectors like public buses, government fleets, delivery vans, and shared taxis. These rules would start off flexible and become stronger over time, giving industries time to adjust.

So far, India has spent nearly ₹40,000 crore on EV subsidies, but electric vehicles still make up only 7.6% of total vehicle sales. The government aims to reach 30% EV sales by 2030, and NITI Aayog believes that simply offering financial incentives won’t be enough to hit that target. Instead, it wants policies that nudge industries to switch to EVs faster, especially in segments where it can have the most impact, like public transport and goods delivery.

In its new report, titled “Unlocking a $200 Billion Opportunity: Electric Vehicles in India”, NITI Aayog also proposes a National EV Policy that clearly defines targets and deadlines. It suggests the use of blended finance models to reduce the upfront cost of electric buses and trucks. It also emphasizes the need to invest in battery R&D to cut import costs, set stronger fuel efficiency norms, and implement tighter pollution control rules for petrol and diesel vehicles.

The report highlights the importance of expanding charging infrastructure, encouraging shared mobility, and making EVs more affordable through service-based ownership models, like leasing and subscriptions. NITI Aayog believes this new direction can unlock a $200 billion EV market, create jobs, and make India a global hub for clean mobility.