United States Collaborates With India To Boost E-Mobility Adoption

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According to the proposed plan, currently undergoing consultations among various ministries, the United States intends to allocate $150 million (approximately INR 1,250 crore) to establish a fund. This fund will act as a payment assurance for firms providing electric buses to struggling state transport undertakings (STUs). Discussions are ongoing between the two parties to determine the specifics of this financial arrangement.

India and the US are collaborating to expedite New Delhi’s shift to electric public transport systems, a move that aligns with India’s net zero ambitions. This partnership reflects the deepening trade and political relations between the two nations, especially in the context of balancing China’s global influence.

Under the current proposal, subject to inter-ministerial review, the US is set to provide a $150 million (around INR 1,250 crore) fund. This fund will serve as a financial safeguard for companies that supply electric buses to financially struggling state transport undertakings (STUs). The specifics of this financial framework are currently being finalized. This initiative is geared towards accelerating e-mobility in India, particularly in its highly polluted urban areas. Post Cabinet approval, the Indian government plans to issue multiple tenders for approximately 50,000 electric buses. These buses, to be deployed over five years as part of the National Electric Bus Programme (NEBP), are part of a larger strategy aimed at reducing dependency on expensive oil imports and cutting down vehicular emissions.

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A senior government official, speaking anonymously, informed that the final stages of discussions are underway to establish a payment security mechanism to replace diesel buses with electric alternatives. This proposal is now undergoing inter-ministerial consultations before seeking Cabinet sanction. Electrifying buses is a top priority for the government due to its significant social and environmental impact.

This proposal is being deliberated while India’s Commerce and Industry Minister, Piyush Goyal, is visiting the US. During this visit, he is expected to meet Tesla CEO Elon Musk to discuss Tesla’s potential factory establishment in India. Additionally, US President Joe Biden’s anticipated visit to New Delhi in January as the chief guest for the Republic Day celebrations is likely to further strengthen bilateral relations.

The Indian government has been considering tenders for replacing older, polluting diesel buses with electric ones under the NEPB, given the country’s serious vehicular pollution issues, particularly in urban areas. However, a tender by Convergence Energy Services Ltd (CESL) in January 2023 for 4,675 electric buses, valued at INR 5,000 crore, faced challenges as established automakers did not participate, citing the absence of payment guarantees.

The official also mentioned that once all approvals are granted, a payment security mechanism will be established, paving the way for new tenders. Additionally, there are plans to set up an escrow account as a payment security measure for electric bus manufacturers in case STUs fail to make payments.

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Aryaman Raghuvanshi
Aryaman Raghuvanshi
Aryaman Raghuvanshi is a Journalist at EFY. His passion is to explore the future of mobility, which gets him to cover latest technologies shaping the future of automobiles and EVs. But, at times he writes on broader technologies too. LinkedIn: https://www.linkedin.com/in/aryaman-raghuvanshi-2431b7153

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