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FAME III Scheme: India to invest ₹1.5 Trillion to replace 8 Lakh Diesel Buses with Electric in next 7 years

In a strategic move towards environmental sustainability and bolstering the electric vehicle (EV) sector, the Indian government is formulating an extensive plan to replace 800,000 diesel buses, constituting one-third of the nation's bus fleet, with electric counterparts over the next seven years. This visionary initiative aims to reshape the public transport system, align with environmental sustainability goals, and significantly contribute to the growth of the EV industry in India.

Transformative Goals of the Initiative

The central focus of this ambitious plan is multi-faceted:

Environmental Sustainability: By phasing out diesel buses, India aims to address environmental concerns, reduce carbon emissions, and contribute to the global push for cleaner transportation alternatives.

Boosting the EV Sector: The initiative catalyzes the growth of the electric vehicle sector in India. It aligns with the Faster Adoption and Manufacturing of Electric Vehicles (FAME) incentive program, showcasing the government's commitment to promoting sustainable mobility.

Replacement Strategy Breakdown

The proposed replacement strategy unfolds as follows:
  • State Transport Undertakings (STUs): Deployment of 200,000 electric buses
  • Private Operators: Introduction of 550,000 electric buses
  • Schools and Employee Transportation: Inclusion of 50,000 electric buses
This strategic deployment is anticipated to be completed by 2030, marking a transformative shift in India's public transportation landscape.

FAME III Scheme: Driving the Transition

This ambitious undertaking operates within the framework of the FAME III scheme, an integral component designed to expedite the adoption and manufacturing of hybrid and electric vehicles. The scheme provides essential policy support and financial incentives to propel the widespread adoption of electric mobility solutions.

Holistic Benefits Beyond Environmental Impact

Beyond addressing environmental concerns, the initiative holds the potential for far-reaching benefits:

Charging Infrastructure Development: The mass adoption of electric buses is poised to accelerate the establishment of a robust charging infrastructure across the country.

Investment Attraction: The EV sector's growth is expected to attract investments, fostering technological advancements and innovation.

Economies of Scale: Large-scale adoption will contribute to economies of scale, reducing per-unit costs for electric buses.

Employment Generation: The initiative is anticipated to generate employment opportunities, particularly in the manufacturing sector.

FAME III and India's Global Commitments

This initiative aligns with India's global commitments towards sustainable development. The proactive approach towards electrification of public transport also resonates with the recent collaboration with the US to establish a joint payment security mechanism (PSM) for deploying 38,000 electric buses, contributing to net-zero targets.

Future Prospects and Collaborative Efforts

The government's focus extends to the future, with plans for FAME III potentially incorporating production-linked incentives (PLI) schemes and priority lending to fortify the Indian EV industry. The ongoing engagement with stakeholders indicates a collaborative effort to finalize the details of the scheme, expected to be unveiled in the upcoming financial year.

In conclusion, India's ambitious plan to replace 800,000 diesel buses with electric variants signifies a pivotal step towards sustainable and eco-friendly transportation. This transformative initiative not only addresses immediate environmental concerns but also positions India at the forefront of the global transition to cleaner and greener mobility solutions.