EV Subsidies and Government Schemes for Two-Wheelers in India: A Complete 2026 Guide

EV Subsidies and Government Schemes for Two-Wheelers in India: A Complete 2026 Guide

India is in the middle of one of the most significant transportation shifts in its history. Electric two-wheelers are no longer a futuristic idea. They are parked outside homes in Tier-1 cities, charging on apartment balconies, and zipping through the lanes of smaller towns. A big reason behind this rapid adoption is the financial support offered by the central and state governments through a range of EV subsidies and incentive schemes.

If you have been thinking about making the switch to an electric scooter or motorcycle, understanding these government benefits can save you a substantial amount of money upfront. This guide breaks down every major scheme, who qualifies, and how much you can actually save.

Why the Indian Government Is Pushing Electric Two-Wheelers

India imports a significant share of its crude oil, making it vulnerable to global price fluctuations. At the same time, urban air quality in cities like Delhi, Mumbai, and Bengaluru has been a growing public health concern. Electric vehicles, particularly two-wheelers which make up the largest segment of the vehicle population, offer a practical solution to both problems.

The government has set an ambitious target of achieving 30% electric vehicle penetration by 2030. To reach that goal, making EVs financially accessible to the average Indian buyer is absolutely essential. This is where the subsidy ecosystem plays a central role.

FAME II Scheme: The Backbone of EV Incentives in India

The Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles scheme, commonly known as FAME II, was launched in April 2019 with a total outlay of Rs. 10,000 crore. It is managed by the Department of Heavy Industries under the Ministry of Heavy Industries and Public Enterprises.

How FAME II Benefits Electric Two-Wheeler Buyers

Under FAME II, eligible electric two-wheelers receive an incentive of Rs. 15,000 per kWh of battery capacity. This incentive is applied at the point of sale, meaning the price you see at a dealership is already discounted. You do not need to file separately for this benefit in most cases.

The scheme has specific eligibility criteria for vehicles. To qualify, an electric two-wheeler must meet the following conditions:

• The vehicle must be manufactured in India and meet minimum localization requirements set by the government.
• The vehicle must have a minimum speed of 40 km/h and a minimum range of 80 km per charge.
• The top speed should be at least 40 kmph as verified by testing agencies.
• The vehicle must be registered in India and used for personal or commercial purposes.

The maximum incentive cap under FAME II for two-wheelers has been periodically revised. As of the most recent update, buyers can receive incentives that can range anywhere from Rs. 10,000 to Rs. 30,000 depending on the battery size and vehicle cost.

PM e-DRIVE Scheme: The Next Chapter in EV Support

With FAME II winding down, the central government announced the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM e-DRIVE) scheme in September 2024. This scheme is seen as the successor to FAME II and aims to provide broader and more targeted support to the EV ecosystem in India.

The PM e-DRIVE scheme has a total allocation of Rs. 10,900 crore and is active until March 2026. For electric two-wheelers, the scheme continues demand incentives and also focuses on building charging infrastructure across the country, which directly addresses the range anxiety concern that many potential buyers still have.

The subsidy structure under PM e-DRIVE for two-wheelers is expected to follow a similar kWh-based calculation, with additional benefits for vehicles targeting commercial use such as food delivery and logistics.

State-Level EV Subsidies: Where You Live Matters

Beyond the central government schemes, several Indian states have introduced their own EV policies that stack on top of national incentives. This means buyers in certain states can access considerably higher total savings.

Maharashtra

Maharashtra was among the first states to announce a dedicated EV policy. The state offers an early bird incentive of Rs. 5,000 for the first 1 lakh electric two-wheeler purchases. Additionally, buyers are exempt from road tax and registration charges, which can save another Rs. 2,000 to Rs. 5,000 depending on the vehicle cost.

Delhi

Delhi has one of the most aggressive EV subsidy programs in the country. Under the Delhi EV Policy, electric two-wheeler buyers receive a subsidy of Rs. 5,000 per kWh for the first 2 kWh of battery capacity. On top of this, there is no road tax, no registration fee, and a scrapping incentive for those giving up an old petrol two-wheeler. The total savings in Delhi can go up to Rs. 35,000 to Rs. 45,000 when combined with central incentives.

Gujarat

Gujarat offers a fixed subsidy of Rs. 10,000 per electric two-wheeler along with road tax waiver. The state has been proactive in building charging stations, particularly in Ahmedabad, Surat, and Vadodara, making the ownership experience more practical.

Rajasthan

Rajasthan offers a subsidy of Rs. 5,000 for electric two-wheelers along with an exemption from road tax. Given that Rajasthan sees high petrol consumption due to vast rural distances, the push toward electric two-wheelers is especially relevant for daily commuters in cities like Jaipur, Jodhpur, and Kota.

Tamil Nadu

Tamil Nadu provides road tax exemption and a 100% waiver on registration fees for electric vehicles. The state also offers a 15% capital subsidy on the ex-factory cost of electric vehicles manufactured in the state, benefiting local production.

Telangana

Telangana provides 100% road tax exemption for electric two-wheelers and has set up a dedicated green channel for faster EV registration at RTOs across the state.

Additional Financial Benefits You Should Know About

Income Tax Deduction Under Section 80EEB

If you take a loan to purchase an electric two-wheeler, you can claim a deduction of up to Rs. 1.5 lakh on the interest paid under Section 80EEB of the Income Tax Act. This benefit is available to individual taxpayers and can make a significant difference over the loan tenure.

GST Reduction

The government has reduced GST on electric vehicles to just 5%, compared to 28% applicable on petrol-powered vehicles. This alone represents a massive saving when you look at the total cost of the vehicle. Battery packs are separately taxed at 5% as well, making the overall cost structure of electric two-wheelers far more affordable.

Lower Registration and Road Tax

Many states have completely waived registration fees and road tax for electric vehicles. In states where this waiver is in place, buyers save anywhere from Rs. 2,000 to Rs. 8,000 depending on the ex-showroom price of the vehicle.

How to Claim EV Subsidies When Buying a Two-Wheeler

The process for claiming EV subsidies in India has been simplified considerably over the years. Here is a general step-by-step flow:

• Visit an authorized dealership selling FAME II or PM e-DRIVE eligible electric two-wheelers.
• The dealer will check whether the model is listed on the approved vehicle list maintained by the Department of Heavy Industries.
• If eligible, the subsidy is deducted from the invoice at the point of purchase. You pay only the post-subsidy amount.
• For state-level subsidies that are not applied at the dealership, you may need to apply through the respective state transport department portal, submitting your vehicle registration certificate and purchase invoice.
• Keep your Aadhaar, PAN, and vehicle documents handy as they are required for both central and state-level claims.

Choosing the Right Electric Two-Wheeler Under These Schemes

With so many models available in the market today, it is important to verify that the electric two-wheeler you are interested in is actually listed under the applicable government scheme before finalizing your purchase. Not all models are approved, and buying an unapproved vehicle means losing out on the incentive entirely.

GBB E Mobility offers a range of electric two-wheelers that are aligned with the current regulatory and subsidy framework in India. When exploring your options, it helps to work with manufacturers and dealers who are transparent about scheme eligibility and can guide you through the documentation process smoothly. 

What the Future Holds for EV Subsidies in India

The Indian government has consistently signaled its commitment to the EV transition. The PM e-DRIVE scheme running through 2026 provides some near-term certainty. Additionally, the Production Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC) battery manufacturing is expected to bring down battery costs significantly over the next two to three years, which will in turn reduce vehicle prices even before subsidies.

The National Electric Mobility Mission Plan and various NITI Aayog proposals suggest that incentive structures will evolve but are unlikely to disappear entirely in the medium term. For buyers, this means the window to take advantage of the current generous incentives is very much open, but it is worth acting before policies are revised downward as EV adoption scales.

Frequently Asked Questions (FAQs)

What is the current subsidy on electric two-wheelers in India in 2026?

Under the PM e-DRIVE scheme, electric two-wheelers are eligible for incentives calculated at Rs. 15,000 per kWh of battery capacity. Depending on battery size and state of purchase, the total benefit including state subsidies can range from Rs. 15,000 to over Rs. 45,000.

Which states offer the highest EV subsidy for two-wheelers?

Delhi currently offers among the highest combined EV subsidies for two-wheelers in India. When central incentives are added with the Delhi EV Policy benefits such as Rs. 5,000 per kWh, road tax waiver, registration fee exemption, and scrapping incentive, total savings can cross Rs. 45,000.

Is FAME II still active for electric two-wheelers?

FAME II has largely been succeeded by the PM e-DRIVE scheme announced in September 2024. However, vehicles that were approved under FAME II may still be eligible under transitional guidelines. Always confirm with your dealer or the Department of Heavy Industries approved vehicle list.

Can I get income tax benefit on an electric two-wheeler loan?

Yes. Under Section 80EEB of the Income Tax Act, individuals can claim a deduction of up to Rs. 1.5 lakh on interest paid on a loan taken for purchasing an electric vehicle, including two-wheelers. This benefit is available for loans sanctioned from April 1, 2019, to March 31, 2026.

How do I know if an electric two-wheeler is eligible for government subsidy?

You can check the official list of approved electric vehicles on the Ministry of Heavy Industries website or the VAHAN portal. Alternatively, an authorized dealer of the brand can confirm eligibility before purchase. Always verify this before making your booking.

What documents are required to claim EV subsidy in India?

Generally, you will need a valid Aadhaar card, PAN card, vehicle purchase invoice, registration certificate, and bank account details for any direct benefit transfers. State-level subsidies may have additional requirements such as a state domicile certificate.

Does GST reduction on EVs apply to two-wheelers as well?

Yes. The GST rate on electric two-wheelers is 5%, which is significantly lower than the 28% applicable on conventional petrol-powered two-wheelers. This reduction is already reflected in the ex-showroom prices quoted by manufacturers and dealers.