Govt. mulling FAME scheme & GST cut on hydrogen vehicles like Nexo & Mirai

The Indian government is considering introducing special benefits for buying hydrogen fuel cell electric vehicles (FCEVs), as per a new PTI report (via It could launch a new FAME scheme and cut GST on hydrogen FCEVs in the country.

NITI Aayog member V K Saraswat has revealed the latest development about promoting hydrogen FCEVs in India. Saraswat was speaking at a virtual event of FICCI. He said:

Can we bring schemes like FAME, which has been done in the case of battery vehicles, in the case of hydrogen-powered systems or fuel cell-powered systems, can we bring in the same kind of GST infrastructure, all these thoughts are going on.

V K Saraswat, member, NITI Aayog

Speaking further, Saraswat revealed that he is already conducting meetings with automakers to push hydrogen FCEVs in India, and Mahindra has been one of them. He sees hydrogen becoming a “key part of India’s energy mix” in two-three years, which is when he sees its price coming down.

Hydrogen FCEVs are technically more sophisticated and thus costlier. Current hydrogen FCEVs like the Hyundai Nexo and the Toyota Mirai, that have been displayed in India, are seen as expensive vehicles even in developed countries where customers have high purchasing power. For instance, even in an import-friendly country like Germany, the Hyundai Nexo retails at EUR 77,008.4 (INR 68.13 lakh) and the 2021 Toyota Mirai costs EUR 63,900 (INR 56.53 lakh) onwards. The development of hydrogen FCEVs is going to be limited and remain restricted mainly to larger cars for the next few years.

Many automakers, including Volkswagen Group, the world’s no.1 automaker by sales, are of the opinion that hydrogen-based fuel cell technology would have a role more in long-distance and heavy-duty traffic vehicles than light passenger vehicles. Hydrogen and synthetic fuels are expected to remain more expensive than an electric drive for the foreseeable future.

Global automakers are unlikely to evince interest in developing low-cost hydrogen FCEVs just for India in the current scenario. Unless the Indian government cuts punitive tariffs on imports, the launch of world-class hydrogen cars in India look unfeasible. The non-existence of hydrogen fuelling infrastructure is another issue and a skeletal availability of dispensing stations starting with Tier 1 cities could get manufacturers interested in a pilot project. It would be interesting to see where these developments lead to, as the government opens doors for experimenting with more alternative fuels.