India’s federal think tank has called on scooter and motorcycle makers to come up with a plan to switch to electric vehicles, days after publicly opposing government proposals saying they would disrupt the industry, two sources said to Reuters.
Niti Aayog officials met with executives from companies such as Bajaj Auto, Hero MotoCorp and TVS on Friday evening, giving them two weeks to work out the plan, according to one of the executives.
The think tank, which is chaired by Prime Minister Narendra Modi and plays a key role in policymaking, had recommended that only electric models of scooters and motorcycles with a displacement of more than 150cc be sold from 2025, sources told Reuters.
Automakers opposed the proposal and warned that a sudden transition, at a time when auto sales fell to a two-decade low, would lead to market disruption and job losses.
India is one of the world’s largest two-wheeler markets with sales of over 20 million scooters and motorcycles last year.
During Friday’s meeting, government officials argued that the switch to electric vehicles was of national importance so that India did not miss the global trend towards more environmentally friendly vehicles, said the one of the sources.
But industry leaders responded that premature change without an established supply chain, load infrastructure or skilled workforce in India, could cause India to lose its leading position in scooters and motorcycles, the second source said.
“There were clearly protracted positions,” the source said, adding that there were “strong opinions” at the meeting.
Bajaj, Hero and Niti Aayog did not respond to a request for comment, while TVS declined to comment.
Niti Aayog is working with several other ministries on the recommendations, which are part of an electrification effort to help India lower its fuel import bill and cut pollution.
The proposal also includes incentives for local battery production, an increase in the cost of owning gasoline-powered cars and the formation of an old-vehicle disposal policy, according to government meeting records seen by Reuters.
The panel also suggested measures such as ordering taxi aggregators like Uber and Ola to convert 40% of their fleets to electricity by April 2026, Reuters reported.
Executives from electric vehicle start-up Ather Energy, ride-sharing company Ola and officials from the Society of Indian Automobile Manufacturers (SIAM), an industry trade body, also attended the meeting, said. the sources.
The proposals are India’s second attempt to switch to electric vehicles. In 2017, he proposed an ambitious plan primarily for electric cars, but backed down after facing resistance from automakers.
The current push could disrupt the market order for two-wheelers and open up avenues for local start-ups, analysts say.
Scooter and bicycle start-ups like Ather, 22Motors and Okinawa are already emerging in India.
“It is extremely essential that we make the transition to electricity quickly lest we be wiped out by another global wave,” said Tarun Mehta, CEO and co-founder of Ather.