The Heavy Industry Ministry has denied a subsidy worth Rs. 1100 crore.

Manufacturers of electric vehicles have asked for the reinstatement of a subsidy intended to encourage vehicle sales. The decision to unilaterally discontinue the support, according to the corporations, will "kill the very life breath of the industry."

The Ministry of Heavy Industries has allegedly blocked subsidy payments to nearly all of the major producers of electric two-wheelers, according to a letter from the Society of Manufacturers of Electric Vehicles (SMEV) to the government. This has created an unprecedented situation, the letter claims.

A committee should be established to investigate the matter and find a solution before "declarations of closure start pouring out in public," according to the industry association.

The center has denied subsidies worth Rs 1100 crore intended to promote electric vehicles in the nation due to allegations that manufacturers are not abiding by localization standards. The FAME aimed to encourage the purchase of electric automobiles. The current arrangement credits the manufacturers of EVs with a subsidy when the cars are sold.

This cannot continue, and many of the firms will go out of business. The letter stated that to unilaterally eliminate subsidies is to suffocate the industry's essential life force.

According to SMEV, customers have already received payments from the Rs 1100 crore that the Heavy Industries Ministry had withheld as part of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) in India program.

As a number of EV manufacturers make use of the incentives offered under the Rs 10,000 crore Faster Adoption and Manufacturing of Electric and Hybrid Vehicles in India-II (FAME-II) plan, the center addressed notifications to them in October of this year asking them to confirm that the majority of the components used in their cars are obtained locally. Following the sale of these vehicles, the subsidies offered to the EV firms were also suspended awaiting the inquiry.

Although EV manufacturers first avoided the subject, they have now come up to say that the localization standards outlined in the FAME plan are not realistic in the near future. The letter stated, "At the heart of the issue is the Department's illogical behavior vis-a-vis the localization rules versus target dates which, as everyone is aware, sustained a serious setback owing to the two years of COVID blackouts."

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