World EV Day Special: Making EVs Truly Accessible in India

India’s recent overhaul of the Goods and Services Tax (GST) has simplified the tax system while signalling a strong intent to move toward sustainable mobility. The new framework now largely rests on two slabs – 5 per cent and 18 per cent – with a much higher 40 per cent applied to certain luxury and “sin” goods.

For the automobile industry, the restructuring means smaller internal combustion engine (ICE) cars fall under the 18 per cent category, while larger models attract 40 per cent, replacing the earlier patchwork of 28–31 per cent and 43–50 per cent. The removal of the compensation cess has further streamlined the regime. What is most notable, however, is the decision to place electric vehicles (EVs) in the lowest slab of just 5 per cent, irrespective of size or price.

This preferential rate reflects the government’s intent to nurture India’s growing EV ecosystem. The timing is critical: globally, transport contributes about a quarter of greenhouse gas emissions, and in India, the sector is responsible for nearly 14 per cent of total CO₂ output—of which road transport makes up the lion’s share. If India is to meet its 2070 net-zero target and its aspiration of becoming a Viksit Bharat by 2047, transport decarbonization will be central.

Research from the International Council on Clean Transportation (ICCT) underscores the scale of the challenge. It finds that for India to stay aligned with its net-zero pathway, the entire motor vehicle stock – both passenger and freight – must transition to electric no later than 2045–2050. This highlights the urgency of ambitious policies to accelerate the shift today.

Yet lower taxes alone will not make EVs mainstream. To truly accelerate adoption, three policy interventions are key.

1. Strengthen Fuel Efficiency Standards

The Bureau of Energy Efficiency (BEE) has proposed the next phases of Corporate Average Fuel Efficiency (CAFE) standards for passenger cars, alongside draft rules for light, medium, and heavy-duty vehicles. Once finalised, these norms can fundamentally reshape India’s road transport landscape. Fuel efficiency regulations set fleet-wide performance benchmarks, encouraging automakers to innovate, whether through more efficient ICE technology or a faster transition to electrification.

Failing to adopt ambitious standards risks locking India into a trajectory of fuel-intensive vehicles, rising dependence on foreign oil, and higher emissions. Strong, predictable efficiency rules will provide automakers with long-term clarity and ensure that vehicles entering the market align with national energy and climate goals.

2. Introduce a Zero-Emission Sales Mandate

Efficiency is only part of the solution. To build real momentum for clean mobility, India should consider a zero-emission vehicle (ZEV) sales mandate. This policy would require automakers to sell an increasing share of EVs, providing a clear path to phasing out ICE models over time.

Such mandates have proven effective elsewhere. California’s ZEV policy helped build one of the world’s largest EV markets, while China has scaled up adoption at an unprecedented pace through similar approaches. In India, highly polluted regions like Delhi NCR could be natural testing grounds for such a policy, aligning local air quality needs with broader national decarbonization objectives.

3. Build a Robust Charging Ecosystem

The EV transition is only possible with accessible charging. Both U.S. data and inputs from Indian automakers confirm that the vast majority of charging – up to 90% – happens at home. This underscores the need for a “Right to Charge” framework, ensuring EV buyers in apartments and housing complexes have guaranteed access to charging facilities.

At the same time, public charging must be scaled up quickly. National highways and expressways should be systematically equipped with fast-charging stations at regular intervals, enabling long-distance travel and building confidence among individual drivers and fleet operators alike.

Seizing the Opportunity

India’s transport sector stands at an inflection point. With the right mix of standards, mandates, and infrastructure investment, this transition can deliver multiple dividends: cleaner air, reduced oil imports, new employment opportunities, and leadership in a rapidly expanding global market.

According to NITI Aayog, EVs alone could create a $200 billion market by 2030. Coupled with stronger efficiency measures and electrified road corridors, the economic and environmental gains could be transformative.

For too long, mobility has been seen as a source of pollution and dependence. With bold policies, it can instead become a driver of growth and resilience. The road to a Viksit Bharat is already being paved, and a clean, inclusive, and electrified transport system must be at its core.

Amit Bhatt is India Managing Director, ICCT.

The views expressed are personal