In a significant stride toward decarbonizing India’s transportation sector, the Government of India, under the leadership of Prime Minister Mr. Narendra Modi, has launched the nation’s first-ever electric truck (e-truck) incentive scheme on July 14, 2025. Spearheaded by the Ministry of Heavy Industries under the stewardship of Union Minister Mr. Haradanahalli Devegowda Kumaraswamy, the scheme is a core component of the broader PM E-DRIVE initiative, aimed at ushering in a green mobility revolution across India's freight transport sector.

This landmark incentive scheme is designed to bring about a paradigm shift in India’s heavy-duty vehicle segment, where diesel trucks, though comprising only 3% of the vehicle population, are responsible for a staggering 42% of transport-related greenhouse gas emissions. By extending direct government support to e-trucks for the first time, the initiative represents a clear and focused move toward sustainable and environmentally-friendly logistics.

The scheme specifically targets N2 and N3 category trucks, which include vehicles ranging from 3.5 tonnes to 55 tonnes in Gross Vehicle Weight (GVW). The incentives are designed to cover a broad class of commercial transport vehicles that are the backbone of freight movement in sectors like cement, ports, steel, mining, and logistics.

One of the most attractive features of the scheme is the subsidy amount of up to Rs. 9,60,000 (approximately US$ 11,186) per electric truck. This subsidy will be disbursed as an upfront reduction in the purchase cost, making electric trucks significantly more accessible to commercial buyers. The Original Equipment Manufacturers (OEMs) will be reimbursed through a dedicated online portal, ensuring seamless, transparent, and efficient fund distribution.

The scheme also ensures long-term operational reliability by mandating warranty coverage of five years or up to five lakh kilometres for batteries, and 2.5 lakh kilometres for the motor and vehicle, reinforcing confidence among commercial fleet operators in the new e-mobility infrastructure.

In its first phase, the scheme aims to deploy 5,600 electric trucks across the country, including a specific allocation of 1,100 e-trucks for Delhi. This provision comes with a dedicated Rs. 100 crore (US$ 11.7 million) outlay aimed at reducing pollution in the national capital, a city frequently ranked among the most polluted in the world.

A critical condition for availing the incentive is the mandatory scrapping of old diesel trucks, promoting not only fleet modernization but also ensuring environmental gains by taking the most polluting vehicles off the roads. This aligns with the broader Vehicle Scrappage Policy of India, creating operational efficiencies and emissions reductions.

The government has also laid out the key benefits of the scheme:

• Cleaner and more sustainable freight transport

• Lower operational costs over time

• Increased support for domestic electric vehicle manufacturing

• Boost to the circular economy via scrappage incentives

• Direct alignment with India’s Net Zero 2070 and Atmanirbhar Bharat vision

The Indian e-truck market is already witnessing enthusiasm from major OEMs. Volvo Eicher Commercial Vehicles, Tata Motors, and Ashok Leyland have made significant strides in designing and producing electric trucks for India’s terrain and operating conditions. These industry giants are expected to play a central role in fulfilling the e-truck deployment targets under the scheme.

Additionally, Steel Authority of India Limited (SAIL) has already pledged to procure 150 electric trucks and plans to electrify at least 15% of its overall vehicle fleet, showcasing a tangible commitment to industrial decarbonization. With industries like steel, mining, and cement poised to benefit from electrified logistics, the scheme has strong industrial backing and real-world applicability.

The incentive program also has a strong Make in India and Atmanirbhar Bharat orientation. By encouraging domestic OEMs to scale up indigenous EV manufacturing, it supports the development of a robust local supply chain for electric vehicle components, including motors, batteries, control units, and chassis systems.

In addition, this move comes in the wake of global recognition that electrifying commercial transport—especially the heavy-duty sector—is crucial to meeting climate goals under the Paris Agreement. It also aligns with India’s commitments to reduce the emissions intensity of GDP by 45% by 2030 and achieve 500 GW of non-fossil energy capacity.

Notably, the scheme includes:

• Comprehensive eligibility framework for vehicle models

• Pre-qualification norms for OEMs and fleet operators

• Online application system via the Ministry’s EV portal

• Annual performance review and impact analysis mechanisms

It is also expected to trigger further state-level electric mobility programs, particularly in cities with freight pollution hotspots like Mumbai, Bengaluru, Chennai, and Hyderabad. The central government has urged state transport departments and logistics regulators to formulate complementary schemes, including charging infrastructure rollout, urban low-emission zones, and vehicle financing support.

In conclusion, the launch of the first e-truck incentive scheme under PM Modi’s green mobility vision marks a defining moment for India's transition to sustainable transportation. With its ambitious deployment goals, direct support to OEMs, scrappage alignment, and comprehensive coverage of vehicle types, the initiative sets a benchmark for emerging economies looking to decarbonize freight.

The policy is not just a subsidy program—it is a strategic intervention in India's industrial, environmental, and transportation policy landscape. By targeting one of the most polluting segments of the transport sector and offering a financially viable path toward electrification, the scheme is poised to create lasting economic, environmental, and social impact. As the e-truck ecosystem takes shape in India, this policy will act as its foundation stone, encouraging innovation, investment, and job creation while steering the country closer to its net-zero ambition.

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