The Parliamentary Standing Committee on Industry, in its 332nd report on the demands for grants for the Ministry of Heavy Industries for FY27, has recommended extending incentives for electric two-wheelers and three-wheelers under the PM E-DRIVE scheme until March 2028.
According to Nomura, the Parliamentary Committee’s latest industry report on electric vehicles (EVs), which pitches for policy support beyond two-wheelers and three-wheelers to accelerate India’s clean mobility transition, could unlock investment opportunities in the auto and auto ancillary sector.
The brokerage said the panel has pushed for a long-term EV policy framework with stronger focus on localisation, charging infrastructure and fiscal support steps that could improve adoption visibility over the next few years. The panel said continued policy support will be key to sustaining EV adoption as the transition remains uneven across segments.
Parliamentary committee on EV uptake in India
The committee noted that EV uptake in India has largely been driven by electric two-wheelers and three-wheelers, while segments such as electric buses, trucks and ambulances have seen limited progress. It recommended extending incentives for EV two-wheelers and electric three-wheelers, including e-rickshaws and e-carts, until the end of the scheme with a gradual tapering mechanism, restoring original targets for e-rickshaws and e-carts, and accelerating deployment of e-buses, e-trucks and e-ambulances through stricter timelines.
The panel also recommended improving utilisation of the Production Linked Incentive (PLI) scheme for the auto sector and introducing more flexible eligibility criteria to enable greater participation from domestic EV manufacturers and startups.
According to the report, EV penetration also remains uneven across segments. Electric three-wheelers account for the highest share with penetration of 61.1% in FY26 year-to-date, followed by electric two-wheelers at 6.2%. Adoption in passenger vehicles remains modest at 3.9%, while electric light commercial vehicles account for about 2.4% and electric buses around 5.9%.
Nomura said continued government support could accelerate EV adoption, noting that demand incentives help improve EV ownership economics and reduce the breakeven distance versus internal combustion engine vehicles. Faster electrification could benefit manufacturers with higher EV exposure, including Tata Motors’ passenger vehicle business and Mahindra & Mahindra, as well as component makers such as Sona BLW Precision Forgings and Uno Minda.
