Gujarat eyes zero RTO tax and wider subsidies in new EV policy

Against the backdrop of the West Asia crisis that has underscored the pressures of dependence on fossil fuel supplies, the Gujarat govt has decided to introduce a comprehensive electric vehicle (EV) policy to speed up the shift to clean mobility in the state. According to top sources in the govt, stakeholder consultations have been initiated and drafting of the new EV policy is likely to begin soon.

Govt sources said the proposed policy will focus on three areas—boosting EV sales across categories, scaling up charging infrastructure and promoting EV manufacturing through special incentives. “The govt aims to encourage the transition from conventional fuel-powered vehicles to electric alternatives, ranging from two-wheelers and passenger cars to heavy commercial vehicles and multi-axle trucks,” sources close to the development said.

A key thrust of the policy is planned consumer incentives to make EVs more attractive for buyers. Sources said the govt is considering a sharp reduction in registration costs for EV users. At present, fossil fuel-powered vehicles attract a 6 per cent RTO tax, while EVs are taxed at 1 per cent. “The govt plans to reduce the RTO tax on EVs to zero. Subsidies for purchasing EVs are also proposed to be doubled and extended to all vehicle segments, unlike the current framework where benefits are restricted to select categories,” said sources.

On charging infrastructure, the state plans to adopt a public-private partnership (PPP) model to speed up deployment, with charging station operators expected to get power subsidies and other incentives. “The govt also proposes amendments to the General Development Control Regulations (GDCR) to make EV charging facilities mandatory in all buildings,” said an official.

The policy is also expected to add targeted incentives for EV and battery manufacturing, with the govt holding discussions with industry to identify measures to attract investment in EVs and allied sectors. “The state has included EV and battery manufacturing in the thrust sector category in the new industrial policy, and the EV policy will provide additional benefits,” sources said.

Officials said the govt is also considering a regulatory measure like Delhi, where the sale of petrol and diesel vehicles is proposed to be restricted from 2028.

In addition, the state plans to electrify its own fleet in phases. Public transport vehicles and govt-owned vehicles will gradually be replaced with electric alternatives, while new vehicles procured by govt departments will be EVs, officials close to the development said.