India needs National EV policy with clear targets, says Niti Aayog

Government think tank Niti Aayog on Monday called for a comprehensive National Electric Vehicle (EV) policy with defined targets and timelines to accelerate India’s clean mobility push.In its report titled ‘Unlocking a USD 200 Billion Opportunity: Electric Vehicles in India’, the Aayog also recommended widening the scope of corporate average fuel efficiency (CAFE) norms to cover more vehicle segments and shifting from incentives to mandates.

“Establish a national EV policy with clear targets and timelines… Announce a clear policy, with target timelines, for Zero Emission Vehicle (ZEV) adoption,” the Aayog said in the report, launched by Niti Aayog member Rajiv Gauba.

The report advised implementing a phased mandate for EV production and purchase, while disincentivising internal combustion engine (ICE) vehicles.”Design a progressively more stringent plan for mandating the production and purchase of EVs and disincentivising the continued use/production of internal combustion engine (ICE) vehicles,” it added.

The Aayog also proposed the creation of a pooled fund, with contributions from public budgets and multilateral development banks, to offer lower-interest loans for acquiring electric buses and trucks.Additional recommendations include prioritising service-based models over asset procurement, boosting R&D to cut battery costs and reduce reliance on rare earth imports, and scaling charging infrastructure and public awareness systems.

It suggested nurturing a battery leasing industry to lower upfront EV costs and called for a new programme to achieve 100% electrification of buses, para-transit, and freight vehicles in five cities.

Noting that official VAHAN data lacks clarity on EV categories, the report said this impedes policy design and progress tracking.

“India stands at the cusp of a transformative shift in clean mobility,” Gauba said during the launch.

Niti Aayog CEO BVR Subrahmanyam said the report offers a “timely and comprehensive review” of the challenges and actionable steps to speed up the EV transition.

EV sales in India rose from 50,000 in 2016 to 2.08 million in 2024, but penetration remains low at 7.6% – far short of the 30% target by 2030.