February 8, 2026 
6 Min 
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Introduction: Understanding the FAME II Wave
Let’s admit it—navigating government programs can be, well, messy. And the FAME II subsidy (Faster Adoption and Manufacturing of Electric Vehicles Phase II) isn’t an exception. Launched in India on April 1, 2019, it aimed to accelerate electrification of public and shared transport by offering subsidies for e-buses, e-rickshaws, two- and four-wheelers, and charging infrastructure. Yet the scheme’s real-world execution has been peppered with hiccups—eligibility mysteries, changing caps, and compliance drama. Still, it has moved the needle on EV adoption, and that’s worth unpacking.
Benefits of FAME II Subsidy
The scheme brought clear economic and environmental advantages.
Financial Perks for Buyers and OEMs
On the consumer side, buyers enjoyed lower ex-factory prices through demand incentives that manufacturers later reclaim. By December 2023, a whopping ₹5,228 crore had been given out to support the sale of approximately 11.53 lakh electric vehicles . Fast forward to the end of January 2024, and that’s jumped to about ₹5,790 crore across 13.41 lakh EVs . That’s no small change—it reflects scaling-up impact.
Boost to Public and Shared Mobility
The focus has consistently been on public transport and shared-use vehicles. Under FAME II, approximately 6,862 electric buses were sanctioned nationwide, with several thousand deployed already . Meanwhile, infrastructure got a leg up too, with thousands of charging stations rolled out, through collaborations with PSUs like Indian Oil, BPCL, and HPCL .
“FAME II shows how targeted subsidies, especially when tied to shared mobility and infrastructure, can shift transport ecosystems—if managed well.”
— Urban mobility analyst
That quote feels true—but outcomes aren’t uniform, so let’s look closer.
Eligibility Criteria: Who Qualifies?
Clarity on eligibility has been, uh, evolving—and sometimes contentious.
Vehicle Categories and Caps
The roadmap was laid out: support for 1 million two-wheelers, half a million e‑3Ws, 55,000 e‑4Ws, 7,000 e‑buses—and charging infrastructure too . Yet only models meeting certain ex-factory price limits and battery specifications qualify. Several e-scooter models fell through the cracks because they had smaller batteries (<2.5 kWh) and didn’t meet thresholds .
Localization Norms and Compliance
You’d think making things locally is obvious—but apparently not. The scheme demands at least 50% local value addition. Several companies were flagged for misrepresenting imports or splitting invoices (like charger fees) to stay under price ceilings. Investigations clamped down on such maneuvers, hitting especially smaller e‑2W players hard .
Changing Subsidy Factors
Mid-scheme, the subsidy structure for two-wheelers shifted—cut from up to 40% of ex-factory price to a flat ₹10,000/kWh and a cap of 15% of ex-factory price, effective June 1, 2023 . That move aimed to limit over-subsidization, but it sent aftershocks to market pricing and consumer demand.
Application Process: Step by Step Breakdown
Here’s a practical breakdown—though, yes, there’s some gray zone.
OEM Registration and Claim Process
Vehicle manufacturers or OEMs register under FAME II to become eligible for demand incentives. Once sales are made, they claim subsidies based on compliant delivery records. Up to December 2023, ₹5,094 crore had been claimed, with ₹3,815 crore disbursed to 62 OEMs .
Buyer Interaction and Delivery Formalities
In practice, EV buyers don’t directly get money. Instead, dealership or OEMs pass incentive backward, reducing purchase costs. In some cases, buyers have reported receiving calls referencing “FAME II OTP” during delivery—a process that raised eyebrows (and scam anxiety) . The official process is simple: register, get delivery, documentation happens—but avoid sharing sensitive data over phone.
Government Monitoring and Oversight
An inter-ministerial committee (PISC) oversees compliance and implementation. Testing agencies and phased manufacturing guidelines are part of enforcement—including local-content validation and price-related checks .
Real-World Examples and Industry Impact
Put theory aside—let’s peek at what happened on the ground.
It Worked… Mostly
FAME II was no flash in the pan. It helped deploy thousands of e-buses, incentivized over a million EVs, and spurred charging network expansion . For cities and commuters, that’s progress—even if modest.
But It Also Shook Smaller Players
As mention… smaller EV makers bore the brunt when audits tightened. Many small e2W startups collapsed once subsidies got withheld, prompting consolidation in the EV space . Tough, but maybe inevitable when rules suddenly land.
Could Be Ending Soon
Sources suggest FAME II may not extend beyond FY24. Instead, the government could pivot to production-linked incentives (PLI) for EVs and advanced batteries . That’s a strategic shift—from buyer-side demand incentives to supply-side manufacturing pushes.
Conclusion: What Makes FAME II Matter
FAME II has been a mixed bag—messy, sometimes inconsistent, but undeniably impactful. On one hand, it catalyzed EV adoption, especially in shared and public transport. On the other, compliance lapses and shifting policies disrupted the market, especially among smaller players. As PLI programs take the front seat, the focus may shift from subsidies to local manufacturing muscle.
If you’re a buyer—ask for clarity, keep documents clean, and don’t trust OTPs by phone. If you’re an OEM, prioritize compliance, localization, and staying nimble as policy evolves.
FAQs
What exactly does the FAME II subsidy cover?
FAME II offers demand-side incentives to lower the purchase cost of electric two-, three-, and four-wheelers, and buses. It also loans capital support for installing EV charging infrastructure.
Who is eligible for the FAME II subsidy?
Eligibility depends on vehicle category, battery size, ex-factory cost, and at least 50% local value addition. Subsidy norms and caps have changed over time, so eligibility must be verified at the point of purchase.
How do manufacturers claim the subsidy?
OEMs register under the scheme and submit claims based on deliveries of eligible vehicles. Government committees audit compliance before disbursing payments.
Why has FAME II subsidy been reduced since June 2023?
To curb excess payouts, the government cut two-wheeler incentives to ₹10,000 per kWh with a 15% price cap, down from previously up to 40% of ex-factory price.
Is FAME II being extended?
Sources indicate FAME II likely ends after FY24, with a shift toward PLI schemes focusing on local manufacturing, particularly around EV components and batteries.
What if I get a “FAME II OTP” request during delivery?
That’s a red flag—never share OTPs on phone. This may be part of logistic formalities but avoid sharing personal codes until verified via official channels.
