India launches $ 3.5 billion green car incentives
India will spend 257 billion rupees ($ 3.5 billion) on auto sector incentives to boost production of clean cars, the government said on Wednesday as it seeks to reduce greenhouse gas emissions as part of the Paris climate agreement.
The push for electric vehicles is also being fueled by the need to cut pollution, with the country’s major cities of 1.3 billion people harboring some of the dirtiest air in the world.
The program will allow India to “move step by step towards greener electric vehicles and hydrogen fuel cell vehicles,” the cabinet said in a statement.
“This will herald a new era in advanced technology, more efficient and greener automotive manufacturing,” he added.
The incentives will be provided to auto and drone manufacturers in India over a five-year period.
To qualify for the program, new or existing manufacturers must invest at least $ 34 million in India over five years, according to local trade publication Bloomberg Quint.
No further details of the program were released by the government on Wednesday, but it said it is expected to generate some $ 5.8 billion in new investment and create 750,000 jobs.
The announcement follows reports that electric car pioneer Tesla was looking to enter the Indian market. Automotive analyst Awanish Chandra told AFP the program was a clear message from the government that it wanted to “encourage green energy”.
“It’s an equal opportunity for everyone. The government will be very happy if Tesla comes and makes a huge investment. It will give good competition to our own players,” he said.
India is the third largest emitter of carbon in the world and is expected to become the most populous country in the world by the middle of the decade.
The country is on track to exceed its voluntary targets under the 2015 Paris climate agreement.
But carbon emissions are still on track to increase by 50% by 2040, driven by industry and transport.
Some 25 million additional trucks are expected on Indian roads by 2040, according to a forecast by the International Energy Agency.