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Policy Inconsistencies Across States May Slow India’s EV Transition

India’s push toward electric mobility is facing challenges due to inconsistent policies across states, even as the urgency to decarbonize transport continues to grow. Diverging regulatory approaches are creating uncertainty and could hinder the pace of adoption.

Recent developments highlight this contrast. The Delhi Government has proposed an ambitious policy that would allow only electric two-wheelers to be registered by 2028 while offering a complete road tax waiver for electric cars. Around the same time, the Karnataka Government announced the removal of road tax exemptions on electric cars by introducing a lifetime tax, a move widely viewed as a setback for EV adoption.

While Delhi’s proposal has been seen as progressive, Karnataka’s decision to withdraw tax benefits for electric cars priced below Rs2.5 million has drawn criticism. The state has been among the leaders in EV adoption, second only to Maharashtra, making the policy shift particularly notable.

Union Minister Pralhad Joshi criticized the move, stating that increasing the cost of electric vehicles could indirectly favor petrol and diesel alternatives. Such contrasting decisions reflect a broader pattern of uneven policy direction that may slow down the transition to cleaner mobility.

Across India, EV-related policies differ widely in terms of incentives, targets, and implementation timelines at both the central and state levels. In addition to policy variation, delays in execution have also emerged as a concern. For instance, a leading two-wheeler manufacturer is reportedly considering relocating operations from Maharashtra due to delays in subsidy disbursements.

While India’s federal structure allows states to design policies suited to local needs, the lack of alignment with national energy transition goals remains a key issue. The country is targeting 30% EV penetration by 2030, but current adoption levels suggest that significant progress is still required.

EV sales have been rising steadily, with around 696,769 units sold in the first quarter of 2026, marking a notable increase from the previous year. However, EVs still account for only a small share of the overall vehicle market, with millions of conventional vehicles continuing to dominate.

The need to accelerate the shift toward electric mobility has also been underscored by global geopolitical developments. Ongoing tensions in West Asia, including conflicts involving the U.S., Israel, and Iran, have impacted energy supply chains. India’s dependence on oil and gas imports from the region has exposed it to risks such as supply disruptions linked to the Strait of Hormuz.

These developments have reinforced the importance of reducing reliance on fossil fuels and diversifying energy sources. While a complete transition will take time, a more coordinated and consistent policy framework across states will be essential to support faster EV adoption and strengthen energy security.