New Delhi: Despite demands from the electric vehicle (EV) industry, the government may not grant ‘infrastructure industry’ status to the charging infrastructure sector in the upcoming budget on 1 February, two people aware of the development said.
An infrastructure industry status, which allows stakeholders to secure credit at lower interest rates, is unlikely to be granted in the near term, the people mentioned said, because provisions to boost the charging infrastructure are already provided for in the PM E-drive scheme, in operation since October 2024.
The scheme, the third to incentivize adoption of electric vehicles in the last decade, has allocated ₹2,000 crore for setting up public charging stations over the next two years.
Public sector oil marketing companies have also undertaken a massive EV charging infrastructure expansion with a projected cumulative capex of ₹20,000 crore.
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Transitioning to EV
Charging infrastructure is critical in India, where EV adoption is growing rapidly. Over 1.3 million EVs were sold in April-November 2024, compared with 1 million sold in the corresponding period the year before, according to data provided by the ministry of heavy industries.
The Union power ministry stated in a parliamentary disclosure that India has a little over 25,000 public charging stations for EVs.
In comparison, there were over 85,000 petrol stations in the country as on 1 January, 2023, according to a Lok Sabha disclosure by the union ministry of petroleum and natural gas.
The need to massively expand the EV charging infrastructure is also important as it allays range anxiety, a crucial challenge as India sets about its goal of seeing 30% of vehicles running on electricity by 2030.
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Range anxiety is the reluctance to purchase an EV due to the vehicle’s limited range — the distance it covers in one full charge.
The allocation for EV chargers under the PM E-drive scheme will bear up to 80% of the upstream cost of setting up each charging station.
Upstream costs make up the major share of setting up such infrastructure. These include the cost of land, charging equipment, installation and maintenance.
Experts say
Prioritizing investments in charging infrastructure will ensure a seamless transition to sustainable mobility across India, said Akshit Bansal, CEO and co-founder, Statiq, an EV charging service provider.
“The success of EV adoption hinges on the trust and confidence of consumers. A well-developed charging infrastructure will play a pivotal role in building this trust by ensuring that EV owners have easy access to charging points, whether at home, work, or on the road. This, in turn, will encourage more people to make the switch to electric vehicles, knowing that they can rely on a comprehensive support system,” he said.
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Bansal added that the granting of infrastructure industry status to the sector would have helped open up crucial financing opportunities.
“It would provide access to long-term financing at lower interest rates, enabling significant investment in expanding and upgrading charging networks. Additionally, the status could lead to enhanced government support, such as subsidies and incentives, which would reduce operational costs and improve financial viability,” he said.
