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Delhi Launches EV Policy
Home » Blog » Delhi to Launch New EV Policy with Subsidies, Scrappage Incentives, and Expanded Charging Infrastructure
Policy

Delhi to Launch New EV Policy with Subsidies, Scrappage Incentives, and Expanded Charging Infrastructure

Sunita
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Sunita
Last updated: 22 December 2025
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Delhi Introduces EV Scrappage Scheme with Financial Benefits, Expands Residential Charging Facilities to Cut Air Pollution and Establish the City as a Leading EV Hub

The Delhi government is set to roll out a new Electric Vehicle (EV) policy from the next financial year, aimed at promoting cleaner mobility, reducing air pollution, and making EVs more affordable for residents, Chief Minister Rekha Gupta announced on Saturday.


Delhi’s EV Policy 2.0 Draft Prioritises Charging Expansion, Battery Recycling, and New EV Vans for Last-Mile Connectivity


Focus on affordability: The policy intends to bridge the price gap between conventional petrol and diesel vehicles and EVs. “Our goal is to ensure that EVs are affordable for every middle-class family in Delhi and that charging them is as easy as charging a mobile phone,” Gupta said. While the final incentive structure is yet to be disclosed, the government has confirmed that subsidies will be offered to encourage EV adoption.

Vehicle scrappage incentives: The government will introduce a scrappage scheme targeting old and highly polluting vehicles. Citizens who scrap their petrol or diesel vehicles will receive additional financial benefits when purchasing a new EV, according to the CM’s office. The exact incentive amounts are still under consideration.

Expansion of charging infrastructure: Delhi plans to enhance EV charging facilities, including installations in residential colonies. The strategy includes a single-window system for approvals, network expansion, battery swapping stations, and scientific disposal of used batteries to minimize environmental impact and reduce charging time.


Environmental benefits: Gupta emphasized that the policy would play a key role in reducing air pollution, helping to lower PM2.5 and PM10 levels in the city. The government aims to integrate subsidies and charging infrastructure to position Delhi as the leading EV hub in India—and potentially globally.

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Policy background: Delhi’s first EV policy, notified in 2020, expired in August 2023 and has been extended periodically. Under the previous framework, electric two-wheelers received ₹5,000 per kWh (capped at ₹30,000), three-wheelers got a flat ₹30,000, and electric cars were eligible for subsidies of up to ₹1.5 lakh (limited to the first 1,000 vehicles). EVs were also exempt from road tax and registration fees.

Policy finalization: A high-level committee, chaired by Power Minister Ashish Sood, has been reviewing the policy for four months. The panel is finalizing subsidy structures and incorporating expert recommendations to ensure the new EV policy is robust and impactful.


Comment by Author: 

The new EV policy signals a strong commitment by the Delhi government to accelerate the adoption of electric vehicles while tackling urban air pollution. By combining subsidies, vehicle scrappage incentives, and expanded charging infrastructure, the policy aims to make EVs more accessible and convenient for residents. If implemented effectively, Delhi could emerge as a model EV-friendly city, setting benchmarks for other states in India.

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What: India’s finance ministry has directed public sector banks, insurers, and financial institutions to reduce operational spending and accelerate adoption of electric vehicles across official fleets. The move is part of a wider austerity push linked to rising global economic uncertainty and fuel-related risks. The Number: The directive impacts major public institutions including State Bank of India, Bank of Baroda, and Life Insurance Corporation of India, covering millions of employees and thousands of operational vehicles nationwide. The Impact: The policy signals a new phase of institutional fleet electrification in India, where EV adoption is now being tied directly to fiscal discipline, fuel import management, and public-sector operational efficiency. The Core News India’s finance ministry has formally instructed state-run financial institutions to implement strict expenditure controls while simultaneously accelerating EV adoption for official transport operations. The directive from the Department of Financial Services asks organisations to replace petrol and diesel vehicles used at head offices and branch operations with electric vehicles “as far as possible.” The order comes amid growing concern over the economic impact of prolonged geopolitical instability in West Asia, which threatens to increase crude oil prices, widen India’s import bill, and pressure the rupee. Alongside the EV transition mandate, the government has also pushed virtual meetings, reduced foreign travel, and tighter administrative spending controls across public-sector institutions. For India’s EV ecosystem, the directive is strategically important because it expands demand visibility beyond state transport undertakings and government departments into the financial sector itself. PSU banks and insurers operate one of the country’s largest distributed office networks, including regional offices, branch fleets, field operations, and administrative mobility services. Even a phased transition could create a sizeable procurement pipeline for electric passenger vehicles, charging infrastructure providers, and fleet management companies. Breaking Down the Update • The Department of Financial Services issued the austerity and EV adoption directive to PSU banks, insurers, and financial institutions. • The government wants petrol and diesel vehicles used in official operations to be progressively replaced by EVs wherever operationally feasible. • The policy push follows Prime Minister Narendra Modi’s appeal for fuel conservation and controlled discretionary spending amid global energy uncertainty. • The directive also mandates greater use of video conferencing to reduce travel-related operational expenditure. • The move could indirectly support domestic EV OEMs, leasing firms, and charging infrastructure operators through institutional procurement demand. • The banking and insurance sector may emerge as a new enterprise fleet electrification category in India’s EV transition roadmap. How PSU banks EV adoption will help Indian EV Market The expansion of PSU banks EV adoption could create a strong institutional demand layer for India’s electric mobility sector. Public sector banks and insurers operate thousands of branch offices across urban, semi-urban, and rural India. Their transition to EV fleets can generate predictable procurement volumes for domestic automakers, especially in the electric sedan, compact SUV, and commercial mobility segments. Beyond vehicle sales, the policy may also accelerate deployment of workplace charging infrastructure at bank headquarters, zonal offices, and regional branches. This can support charger utilisation economics while helping normalise EV infrastructure in tier-2 and tier-3 cities. Another important impact is signalling. When large state-linked financial institutions adopt EVs as operational assets rather than pilot projects, it improves confidence across the broader enterprise mobility market. Private banks, NBFCs, and insurance firms could eventually follow similar fleet transition models to reduce long-term fuel and maintenance costs. PSU banks EV adoption also aligns with India’s larger energy security strategy. Lower petroleum consumption in institutional fleets directly supports efforts to reduce crude import dependence while stabilising operational expenditure during periods of volatile global oil prices. Conclusion & Next Steps The government’s push toward PSU banks EV adoption reflects a broader shift where EV deployment is increasingly being linked with macroeconomic resilience rather than only sustainability targets. Execution, however, will depend on procurement timelines, charging infrastructure readiness, and operational suitability across
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