MHI Bans Hero Electric and Benling India from All EV Incentive Schemes

In the interim budget, FAME schemes funding reduced by 44% to Rs 2,671 crore for FY25

The Ministry of Heavy Industries (MHI) has barred Hero Electric and Benling India from availing any incentive schemes due to their non-compliance with the flagship Faster Adoption and Manufacturing of Electric Vehicles in India Phase-II (FAME-II) scheme, as per a report by Business Standard.

Senior officials have reported that Hero Electric and Benling India failed to follow the PMP guidelines. These rules play a significant role in the FAME scheme’s goal of enhancing domestic value addition in the electric vehicle (EV) sector.

The PMP guidelines guarantee a substantial portion of manufacturing processes and components are domestically acquired, thus driving the development of local industries and diminishing reliance on imports.

The government designed the FAME schemes to stimulate the adoption and production of EV nationwide (Representative Image: Unsplash)
(Representative Image: Unsplash)

As per an earlier report, the government dispatched recovery notices to Hero Electric, Okinawa, and Benling. The aim was to retrieve about Rs 155 crore from Hero Electric, Rs 125 crore from Okinawa, and Rs 50 crore from Benling.

Between June 2020 and May 2023, Benling India sold 29,803 electric two-wheelers as part of the FAME-II scheme. However, the company only obtained subsidy payments for 19,986 vehicles, leaving an outstanding sum of Rs 42.48 crore with the government, as indicated by the report.

In the interim budget, the central government cut the allotment for the FAME scheme by nearly 44%, assigning Rs 2,671 crore for FY25. This reduction might trigger a downturn in the adoption of EVs in India

The government designed the FAME-II scheme to stimulate the adoption and production of electric vehicles nationwide. It offers monetary incentives to encourage the purchase of EVs and facilitates the growth of charging infrastructure. This scheme plays a vital role in India’s efforts to mitigate greenhouse gas emissions and improve air quality by promoting sustainable mobility.

Within the Indian electric vehicle market, Hero Electric and Benling India are key industry players. Hero Electric is one of the leading producers of electric two-wheelers in India, while Benling India is renowned for its diverse lineup of electric scooters.

In Conclusion

The exclusion of Hero Electric and Benling India from all incentive schemes by the Ministry of Heavy Industries shows the importance of following the PMP guidelines established under the FAME-II scheme. The decision reflects the government’s dedication to fostering domestic value addition within the EV sector and serves as a warning to industry participants regarding the potential fallout of non-compliance.