By Mr. Devndra Chawla, MD & CEO, GreenCell Mobility
As the Union Budget 2026 approaches, the electric bus ecosystem is looking for targeted policy support that enables scale beyond public transport undertakings and brings private operators meaningfully into India’s clean mobility transition. A key expectation is the extension of direct subsidies under FAME and PM E-DRIVE to private intercity and contract operators, who today remain largely outside the incentive framework despite being critical to faster deployment. Equally important is easing access to capital through interest subvention and green financing options, with affordable loan rates in the range of 4 to 6%, which can significantly improve project viability for electric bus investments.
The industry is also seeking the introduction of a dedicated tax deduction, similar to a Section 80 framework, for electrification-related operating expenses such as charging infrastructure, maintenance, and permit costs. Support for charging infrastructure through CAPEX incentives and enabling open access to public authority depots where feasible would help optimise asset utilisation and reduce upfront barriers. In addition, route-level incentives such as toll exemptions and faster permit clearances for operators committing to electrification can meaningfully strengthen fleet economics. Rationalising GST by lowering rates on EV components, batteries and manpower engaged in EV operations would further accelerate adoption.
These interventions are critical at a time when electric mobility has entered a scale-up phase. While over 21.8 lakh EVs were sold between November 2024 and October 2025, electric buses remain significantly underpenetrated, with fewer than 10,000 e-buses operating in a national fleet where diesel continues to dominate. The PM E-DRIVE programme, with an outlay of Rs 10,900 crore and a target of deploying 14,000 e-buses by FY28, is a strong step forward. However, widening eligibility, lowering financing costs and improving operational viability are essential to unlock private sector participation at scale. A stable and forward-looking Budget that aligns incentives, finance, infrastructure, and regulation can help electric buses become commercially viable, reduce diesel dependence, and deliver cleaner, more resilient public transport for India.