ARAI, ICAT officials under probe for mishandling FAME II subsidy
What's the story
The Indian government has launched an investigation into officials from the Automotive Research Association of India (ARAI) and International Centre for Automotive Technology (ICAT) for allegedly granting FAME II subsidies to a total of seven electric vehicle (EV) makers who violated the norms.
Mahendra Nath Pandey, Union Heavy Industries Minister, said, "We are enquiring into the lapses, if any, by all officials involved in the process."
Insights
What is FAME II?
FAME II, which stands for Faster Adoption and Manufacturing of Hybrid and Electric Vehicles, is a scheme initiated by the Government of India to accelerate the development and adoption of EVs.
This scheme is important in the global fight against climate change.
With a budget allocation of Rs. 10,000 crore for its second phase, FAME II aims to achieve the objectives outlined in the National Electric Mobility Mission Plan (NEMMP).
Details
Seven EV makers accused of not following localization norms
Companies like Okinawa and Hero Electric are among the seven EV manufacturers accused of violating the FAME II scheme's localization norms.
To qualify for incentives, companies must manufacture EVs using made-in-India components under this scheme.
The Centre is seeking Rs. 469 crore from these manufacturers for claiming incentives without following the rules.
Ministry of Heavy Industries Secretary Kamran Rizvi stated, "The investigation is underway... the role of officials that led to the funds being wrongly disturbed will be investigated."
What Next?
Only Revolt Motors agreed to refund the incentives they claimed
Revolt Motors is the only company that has committed to reimbursing the claimed incentives. Other companies such as Ampere EV, Benling India, Amo Mobility, and Lohia Auto have not yet fulfilled their obligations.
According to the Society of Manufacturers of Electric Vehicles (SMEV), Indian EV manufacturers have suffered losses of more than Rs. 9,000 crore due to unpaid dues and market setbacks after their subsidies were discontinued last year.
Insights
Investigation is expected to be completed within a month
The investigation is expected to conclude in about a month, after which necessary actions will be taken.
ARAI and ICAT are responsible for ensuring companies' compliance with the manufacturing norms under the FAME II scheme.
The government introduced the scheme in 2019 to promote electric vehicle adoption and local manufacturing, providing subsidies to two-wheeler companies for producing EVs using Indian components.