India’s patchwork of state electric-vehicle (EV) incentives is approaching a turning point, with policies in at least 10 states due to expire in 2027 as EV sales accelerate. In response, federal think tank Niti Aayog has begun work on a next-generation green-mobility framework for states, according to two people aware of the development.
The exercise comes as state policies have helped attract manufacturing and allied infrastructure investment through incentives including fixed-asset subsidies, intellectual-property benefits, and tax waivers or reductions, according to a Mint analysis of various state EV policies.
The timing is significant. India recorded 2.45 million EV sales in fiscal year 2026 (FY26), up 25% from the previous fiscal. EV adoption—the share of electric vehicles in total new-vehicle sales—rose to 8.5% in FY26 from 7.7% in FY25 and 7.2% in FY24, according to data from the government’s Vahan portal.
State-level incentives have worked in tandem with central government EV schemes. The Centre's flagship PM E-Drive scheme supports electric two-wheelers, three-wheelers, buses, trucks and ambulances, with outlay raised to ₹11,900 crore for FY26 from ₹10,900 crore. The Centre also offers manufacturing incentives under the ₹25,938-crore production-linked incentive scheme for automobiles and auto parts, with disbursals having started in FY25 and continuing through FY29.
Tamil Nadu, Telangana, Manipur, Uttar Pradesh, Rajasthan, Chhattisgarh, Himachal Pradesh, Jharkhand, Punjab and Haryana will see their EV policies expire in 2027. Policies in Maharashtra, Karnataka, Madhya Pradesh, Odisha and Kerala are set to end in 2030. Gujarat, West Bengal, and Goa are expected to float new policies shortly.
“Niti Aayog is expected to discuss the impact of various state EV policies in terms of investments that were made in states towards manufacturing EVs and their allied infrastructure, as well as in terms of adoption of the zero-emission vehicles,” said an industry executive, one of the two people cited above, requesting anonymity.
Of India’s 36 states and union territories, 29 have a dedicated EV policy, according to Niti Aayog’s India Electric Mobility Index 2024, the latest version available, published in August 2025. The seven states and union territories without a notified policy are Arunachal Pradesh, Andaman & Nicobar Islands, Jammu & Kashmir, Dadra & Nagar Haveli and Daman & Diu, Nagaland, Sikkim and Lakshadweep, according to the report. Some, including Jammu & Kashmir, have policies in draft stages.
“Since the discussions with states and industry stakeholders are being planned after the Delhi EV Policy 2.0, it is likely that those ideas will be discussed during consultations,” the industry executive cited above said.
Different states, different paths
State governments have pursued different strategies to promote EV adoption.
Uttar Pradesh, Haryana, Rajasthan and Chhattisgarh have chosen to incentivize hybrids alongside EVs, while Maharashtra, Tamil Nadu and Karnataka have focused incentives on EVs. Their policies have also differed in what they seek to promote—sales, manufacturing, or the broader ecosystem.
Karnataka, for instance, has offered capital subsidies for manufacturing units established in the state under its 2025-2030 EV policy, according to the policy document. Maharashtra, which has identified EVs as a “thrust sector” under its 2025-2030 EV policy, has offered 20% fiscal incentives for manufacturers in the EV sector, according to its policy document. Tamil Nadu offers incentives for technology-transfer agreements under its EV policy, as per the document.
The differences are becoming more consequential as some states begin to withdraw or alter support. Karnataka has begun imposing road tax on electric four-wheelers, with EV makers lobbying for the continuation of incentives, Mint reported on 8 April this year.
Delhi’s EV Policy 2.0, notified on 1 July, has also shifted the policy conversation beyond incentives. For the first time, it introduced restrictions on the registration of petrol and diesel vehicles in certain segments, allowing only electric two-wheelers to be registered in the national capital starting April 2028 and only electric three-wheelers from January 2027.
Last week, at the annual convention of industry lobby group Society of Indian Automobile Manufacturers (Siam), Tarun Kapoor, adviser to the prime minister in the Prime Minister’s Office (PMO), said restrictions on sales of conventional-fuel two-wheelers had started being implemented in Delhi and that other regions may follow.
“In two-wheelers, things are going fine, though two-wheeler manufacturers keep telling us that they don't make much money in electric…But this transition is going to happen. There are restrictions which will keep coming in. So in Delhi and this region, already restrictions have started coming in. In other areas also they may start kicking in. So therefore we have to prepare for that,” said Kapoor.
Queries emailed to spokespersons of Niti Aayog and the ministry of heavy industries, as well as to the governments of the states and union territories cited in the story, remained unanswered till press time.
Coherence, not uniformity
Former NITI Aayog official and public-policy expert Abhishek Saxena said it would be difficult for states to pursue completely consistent policies, but some degree of alignment would be necessary.
He said the government’s think tank would not chase consistency in state EV policies, but coherence.
"Each state will have its own way of looking at how to incentivize EVs, whether to boost sales, manufacturing or ecosystem. However, Niti Aayog will be concerned about the focus area of states and what they are choosing to electrify. States also have to act on the basis of signals around them, whether it is to create a comprehensive ecosystem from manufacturing plants to ports with ecosystems for trucks. The state public policy machinery can also align itself with some central goals to make the best out of those opportunities in segments like buses and trucks.”