FAME III Subsidy for Electric Vehicles in India 2026: Everything You Need to Know

The Indian government’s electric vehicle subsidy journey — from FAME I to FAME II to PM E-DRIVE — has entered a pivotal new phase in 2026. If you’re planning to buy an electric scooter, car, or three-wheeler and wondering whether a FAME III subsidy applies to you, here’s the definitive answer: FAME III, as commonly referenced, is now officially called the PM E-DRIVE (Electric Drive Revolution in Innovative Vehicle Enhancement) Scheme, and it is very much active with real money available for buyers. This guide breaks down exactly what’s on offer, who qualifies, and how to make sure you get every rupee you’re entitled to.

What Is FAME III? The Transition from FAME II to PM E-DRIVE

FAME stands for Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles, a flagship scheme by India’s Ministry of Heavy Industries (MHI). The program ran in two phases:

• FAME I (2015–2019): Outlay of ₹895 crore; primarily focused on hybrid vehicles and demand creation.
• FAME II (2019–2024): ₹11,500 crore outlay; direct subsidies on electric two-wheelers, three-wheelers, buses, and charging infrastructure.

When FAME II ended in March 2024, the government briefly introduced the Electric Mobility Promotion Scheme (EMPS 2024) as a bridge. Then, on September 29, 2024, the Ministry of Heavy Industries officially notified the PM E-DRIVE Scheme — with a total outlay of ₹10,900 crore valid through March 31, 2026.

Budget 2026-27 has since earmarked an additional ₹1,500 crore to extend PM E-DRIVE support, with a continued focus on electric buses, two-wheelers, and public charging. When people search for “FAME III,” this is the scheme they’re looking for.

PM E-DRIVE Scheme: Key Numbers at a Glance

• Total Outlay: ₹10,900 crore (original) + ₹1,500 crore (Budget 2026-27 extension)
• Electric Two-Wheelers: 2.47 million units targeted for subsidy support
• Electric Three-Wheelers: 3.16 lakh units
• Electric Buses: 14,028 units across state transport undertakings
• Charging Infrastructure: ₹2,000 crore earmarked for public charging stations

The government’s stated targets are bold: 10% market share for electric two-wheelers and 15% market share for electric three-wheelers by the end of the scheme period.

FAME III / PM E-DRIVE Subsidy Amounts: Category-Wise Breakdown

Electric Two-Wheelers (E2W)

Under PM E-DRIVE, the subsidy for electric scooters and motorcycles is linked to battery capacity:

• Subsidy rate: ₹5,000 per kWh of battery capacity
• Maximum subsidy: ₹10,000 per vehicle
• Ex-factory price cap: Vehicle must be priced below ₹2.5 lakh (ex-showroom) to qualify
• The subsidy is applied at the point of purchase — you pay the reduced price directly to the dealer

For example, an Ola S1 Pro with a 4 kWh battery qualifies for ₹10,000 in subsidy. An Ather 450X with a 3.7 kWh battery similarly qualifies for up to ₹10,000. This amount is deducted from the on-road price at the time of booking.

Electric Three-Wheelers (E3W)

• L5 category (4-wheeler-like): Subsidy of ₹25,000 per vehicle from April 2025
• L2/L3 category (cargo/passenger e-rickshaws): Subsidy of ₹10,000–₹15,000 depending on battery size
• Fleet operators with registered commercial vehicle permits get priority allocation

Electric Buses

• 12-metre AC electric buses: Subsidy up to ₹30 lakh per bus
• Targeted at state transport undertakings (STUs) in 9 major cities
• Buses must be procured through government tender processes

Electric Four-Wheelers (Private Cars)

This is a common question — and the honest answer is: PM E-DRIVE does not include direct purchase subsidies for private electric passenger cars. The FAME subsidy for private e-cars was removed starting FAME II Phase 2 revision (2021), and it has not returned under PM E-DRIVE or the interim EMPS scheme.

However, private EV car buyers can still benefit from:

• Income tax deduction under Section 80EEB: Up to ₹1.5 lakh on loan interest for EV purchases
• State-level subsidies: States like Maharashtra, Delhi, Gujarat, and Karnataka offer additional EV incentives of ₹1–5 lakh on cars
• Reduced GST: EVs attract only 5% GST vs 28–48% on petrol/diesel cars

For a comprehensive breakdown of state + central incentives, see our guide: EV Subsidy India 2026: State-Wise Complete Guide.

Who Is Eligible for the FAME III (PM E-DRIVE) Subsidy?

To qualify for the PM E-DRIVE subsidy on a two-wheeler or three-wheeler purchase, you must meet these criteria:

1. Vehicle must be on the approved list: Only vehicles certified by the Automotive Research Association of India (ARAI) and listed on the MHI portal qualify. Dealers will confirm this automatically.
2. Buy from an authorized dealer: The subsidy flows through the manufacturer-dealer chain; private or grey-market purchases do not qualify.
3. Price cap compliance: Two-wheelers must have an ex-factory price under ₹2.5 lakh. Three-wheelers have separate caps depending on category.
4. Battery technology: Vehicle must use a lithium-ion or advanced chemistry cell (ACC) battery — lead-acid vehicles are excluded.
5. Indian buyer: The vehicle must be registered with an Indian address. There is no income or category restriction for individual buyers.

You do not need to apply separately or submit paperwork. The subsidy is automatically factored into the price you pay at the dealership.

How to Claim the FAME Subsidy in 2026: Step-by-Step

1. Choose an eligible vehicle: Confirm with the dealer that the model is listed under PM E-DRIVE. Ask them to show you the subsidized price vs list price.
2. Book and pay: The dealer deducts the subsidy amount from your invoice. You pay the post-subsidy price only.
3. Registration: The dealer registers the vehicle in your name with the state RTO. Some states have integrated EV registration portals.
4. Manufacturer claims reimbursement: The manufacturer submits a claim to the MHI portal for the subsidy amount. This happens in the background — you’ve already received your benefit.
5. Keep your invoice: Your GST invoice will show the original price, the subsidy deduction, and the final amount paid. Keep this for insurance, loan, and income tax purposes.

Top Electric Two-Wheelers Eligible for FAME Subsidy in 2026

Several popular models qualify for the PM E-DRIVE subsidy in 2026:

• Ola S1 Pro Gen 3 — ₹10,000 subsidy applied at checkout
• Ather 450X Gen 4 — Eligible (battery >3 kWh)
• Bajaj Chetak Urbane — Eligible, priced well under the cap
• TVS iQube S — Eligible
• Hero Vida V2 Pro — Eligible, popular for budget buyers
• Ampere Magnus EX — Eligible, strong option under ₹1 lakh net

Always verify eligibility at time of purchase, as the approved vehicle list is updated quarterly by MHI.

FAME II vs FAME III (PM E-DRIVE): What Changed?

The key takeaway: subsidy amounts per vehicle are lower than FAME II peaks, but the program scope has widened significantly — especially for public charging infrastructure and electric buses.

What Happens After March 2026?

The original PM E-DRIVE scheme was valid through March 31, 2026. The Union Budget 2026-27, presented on February 1, 2026, allocated ₹1,500 crore specifically to PM E-DRIVE. This signals the government’s intent to continue EV demand support into FY 2026-27.

Industry bodies like SMEV (Society of Manufacturers of Electric Vehicles) have lobbied for higher subsidy rates under a formal FAME III framework with a ₹20,000+ crore outlay. As of March 2026, the formal FAME III notification is pending — but support continues under PM E-DRIVE with the Budget 2026-27 allocation.

Our advice: don’t wait for FAME III. PM E-DRIVE subsidies are available now, EVs are at their most competitive pricing in history, and electricity costs remain a fraction of petrol. The running cost savings alone often outweigh any future subsidy increase.

For a full cost comparison, check our deep dive: Electric vs Petrol Car Running Cost Comparison India 2026.

State Subsidies on Top of FAME: Stack Your Savings

One of the most underutilized opportunities in Indian EV buying is stacking central and state subsidies. PM E-DRIVE subsidy is the central government benefit — but many states add their own on top:

• Maharashtra: ₹25,000 additional subsidy on e2Ws (non-commercial)
• Delhi: ₹5,000–₹30,000 depending on vehicle type + road tax exemption
• Gujarat: ₹20,000 on electric scooters + registration fee waiver
• Karnataka: ₹10,000 for e2Ws + free green number plate
• Tamil Nadu: 100% road tax exemption on EVs

In states like Maharashtra or Delhi, the combined central + state subsidy on an electric scooter can reach ₹30,000–₹35,000 — a massive discount on a vehicle that costs ₹80,000–₹1.2 lakh on road.

Frequently Asked Questions (FAQs)

Is FAME III active in 2026?

Yes — under the name PM E-DRIVE, the government’s EV subsidy program is active in 2026. The original scheme runs through March 31, 2026, with additional funds allocated in Budget 2026-27. A formal FAME III notification is anticipated but has not been released yet.

Does FAME III subsidy apply to electric cars?

No. PM E-DRIVE (FAME III) does not provide direct purchase subsidies for private electric passenger cars. Subsidies are limited to electric two-wheelers, three-wheelers, and electric buses for STUs. However, state-level subsidies and income tax benefits (Section 80EEB) are available for EV car buyers.

How much is the FAME subsidy on an electric scooter in 2026?

Under PM E-DRIVE, the subsidy is ₹5,000 per kWh of battery capacity, capped at ₹10,000 per vehicle. This is automatically applied at the dealership — you don’t need to apply separately.

Which electric scooters are eligible for FAME subsidy in 2026?

Popular eligible models include Ola S1 Pro, Ather 450X, TVS iQube, Bajaj Chetak, Hero Vida V2 Pro, and Ampere Magnus EX. Check the MHI approved vehicle list before purchase, as the list is updated periodically.

Can I claim FAME subsidy after buying an EV?

No. The subsidy must be applied at the point of purchase through an authorized dealer. It cannot be claimed retrospectively after the vehicle is registered. Always confirm the subsidized price with the dealer before signing the booking form.

What is the difference between PM E-DRIVE and FAME III?

They are effectively the same thing. “FAME III” is the colloquial name used by the public and media; the official name of the scheme launched in September 2024 is the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme. It succeeds FAME II and EMPS 2024.

The Bottom Line

India’s EV subsidy landscape has evolved significantly — but the government’s commitment to electric mobility hasn’t wavered. The PM E-DRIVE scheme (commonly called FAME III) offers real, substantial savings for electric two-wheeler and three-wheeler buyers in 2026. With central subsidies of up to ₹10,000, state-level incentives that can double that figure, and ongoing charging infrastructure investment, this is arguably the best time in India’s history to switch to electric.

If you’re on the fence about which EV to buy, our Best Electric Cars Under ₹15 Lakh India 2026 guide is a great starting point. Already leaning toward a scooter? Check our comprehensive Best Electric Scooters Under ₹1 Lakh India 2026 roundup.

The subsidy is there. The vehicles are there. The only question is: which one will you choose?