Why India's e-truck incentive scheme can be a gamechanger for the economy and the environment

Time of India

4 days ago

On July 11, 2025, when the
Ministry of Heavy Industries
officially released guidelines for subsidies under the
PM Electric Drive Revolution
in Innovative Vehicle Enhancement (PM E-DRIVE) scheme, it marked a historic moment for India's transport sector. For the first time,
electric trucks
(e-trucks) are being supported by specific incentives at the national level. With a budget allocation of ₹500 crore aimed at supporting around 5,500 e-trucks, this initiative provides a critical push to decarbonize India's freight sector—one of the largest and fastest-growing sources of emissions in the country.
Under the new guidelines, medium- and heavy-duty trucks (MHDTs), which are those with a gross vehicle weight of 3.5 tonnes and above, are eligible for subsidies of ₹5,000 per kWh of battery capacity. These subsidies are capped between ₹2.7 lakh and ₹9.6 lakh per vehicle, depending on the different categories of gross vehicle weight, and provide meaningful cost relief for early adopters.
Until now, national-level schemes such as FAME I and FAME II have largely focused on electric passenger vehicles including private two- and three-wheelers and public buses. While there was some provision for the electrification of smaller light commercial vehicles, it was limited. Furthermore, earlier initiatives like the Jawaharlal Nehru National Urban Renewal Mission primarily targeted buses and urban transport infrastructure. By including e-trucks, the PM E-DRIVE scheme is recognizing the critical role of goods movement in India's transport ecosystem. Here's why this shift can be a gamechanger both economically and environmentally.
1. Accelerated climate action and improved air quality
E-trucks are central to India's climate commitments. Life-cycle assessments have estimated that greenhouse gas emissions from e-trucks are 17 per cent–37 per cent less than from diesel trucks, even with today's power grid. When powered by renewable energy, these life-cycle emissions drop by as much as 85 per cent–88 per cent. To meet its long-term climate targets—including achieving net-zero emissions by 2070—analysis by the ICCT projects that India will need 100 per cent zero-emission trucks in new sales by mid-century.
Moreover, as e-trucks produce no tailpipe emissions, they are vital for improving air quality in freight hotspots such as ports, warehouses, logistics hubs, and industrial clusters. This leads to better public health outcomes for communities living near these zones.
2. Reduced operating costs and unlocking industrial use cases
Although e-trucks currently cost 2 to 3.5 times more to purchase than equivalent diesel trucks, their lower operating and maintenance costs help narrow the total cost of ownership gap to about 1.2–1.5 times. The PM E-DRIVE subsidies help bridge this gap even further and make e-trucks more attractive to fleet operators.
Industries such as cement, steel, and port logistics offer promising early-adopter use cases. JK Lakshmi Cement, UltraTech Cement, JSW Cement, Tata Steel, and the Jawaharlal Nehru Port Trust have already begun piloting e-truck deployments for closed-loop freight movement. With effective charging infrastructure and strategic deployment, these pilots can succeed in demonstrating economic and operational viability.
3. Strengthened domestic manufacturing and supporting innovation
To qualify for subsidies, e-truck models must meet phased manufacturing program (PMP) guidelines that promote indigenous production of key components like battery packs, battery management system (BMS), motors, heating, ventilation, and air conditioning (HVAC) systems, converters, and controllers. When combined with the Production-Linked Incentive (PLI) schemes for automotive components and advanced battery cells launched in 2021, this could substantially boost India's e-truck manufacturing ecosystem.
India is the world's third-largest trucking market and the seventh-largest truck exporter. As global markets transition to electric freight, domestic capacity building will be essential to maintain India's competitiveness, create jobs, and ensure long-term value creation.
4. Improved logistics efficiency and reduced fuel dependency
In recent years, India's logistics costs were estimated at around 14 per cent of gross domestic product—higher than the global average. About 70 per cent of freight moves via road, and fuel expenses are a substantial share of transport costs. By reducing fuel dependency, e-trucks can improve logistics cost as a share of gross domestic product and contribute to energy security.
Moreover, transport contributes 14 per cent to India's total greenhouse gas emissions, and MHDTs are 40 per cent of that share. Electrifying this segment is therefore not just economically beneficial but also an environmental imperative.
The PM E-DRIVE scheme is a vital first step in transitioning India's trucking sector towards a clean and
atma-nirbhar
(self-reliant) future. The Ministry of Heavy Industries has now addressed this long-overlooked segment and laid the foundation for systemic change. And it is only the beginning.
For the transition to scale, the next frontiers include investing in nationwide charging infrastructure, facilitating access to affordable financing for fleet operators, and establishing long-term regulatory pathways. An important complementary step would be a swift rollout of the proposed fuel efficiency standards for MHDTs by the Bureau of Energy Efficiency, as such standards help level the playing field and drive faster adoption.
The question is no longer if India will electrify its trucking fleet, but how fast it can lead the global charge. With the right mix of policies, industry collaboration, and public investment, India can set a benchmark for sustainable freight in the 21st century.