FAME III Subsidy Announced: Which Electric Cars Qualify for the New ₹1.5 Lakh Incentive

The Ministry of Heavy Industries notification dated 14 April 2026 has finally clarified what FAME III actually looks like. After 11 months of delay since FAME II expired, dealers can finally start filing claims again. The structure is genuinely better than the leaked drafts from January suggested, but the eligibility list is more restrictive than FAME II was.

What changed from FAME II

FAME II (which ran 2019-2024 with extensions) was a flat ₹10,000 per kWh incentive, capped at ₹1.5 lakh per vehicle. Most popular electric SUVs hit the cap easily, so it was effectively a flat ₹1.5 lakh discount.

FAME III takes a different approach. The incentive now scales with three things:

1. Battery capacity: ₹8,000 per kWh, capped at ₹1.5 lakh.
2. Localisation level: cars manufactured with 50%+ Indian-sourced components get the full incentive. Below 50%, the per-kWh rate drops to ₹5,000.
3. Range certification: ARAI-certified range must be at least 250 km. This rules out a few smaller hatchbacks and most micro-EVs.

So a 50 kWh battery EV with full localisation gets ₹1.5 lakh (capped). A 30 kWh battery with 60% local content gets ₹2.4 lakh × the ₹8,000 rate, so ₹1.92 lakh, capped at ₹1.5 lakh. A 30 kWh with 40% local content gets ₹1.5 lakh × ₹5,000 = ₹1.5 lakh, also capped. Most cars effectively still hit the cap, but the smaller-battery commuter EVs are slightly disadvantaged.

Eligible models as of the April 14 notification

Based on initial screening, these models qualify in full (₹1.5 lakh):

• Tata Nexon EV Long Range (40.5 kWh, 67% local content)
• Tata Punch EV Long Range (35 kWh)
• Tata Curvv EV (45 + 55 kWh variants)
• Mahindra BE 6 (54.4 + 79 kWh variants)
• Mahindra XEV 9e (54.4 + 79 kWh)
• MG Windsor EV (38 kWh)
• MG Comet EV — does NOT qualify (range below 250 km cutoff)
• Hyundai Creta Electric (45 + 51.4 kWh)
• Hyundai Ioniq 5 (72.6 kWh)
• BYD Atto 3 (60.5 kWh, but only at the partial rate due to import status)

The conspicuous absences: most Chinese-imported EVs without local assembly are now excluded. BYD's import-only models get the ₹5,000/kWh partial rate. The Kia EV6 and Mercedes EQB are out entirely (premium price slab and import ratio).

How the claim works at the showroom

This is the part that confused everyone in the FAME II days. Under FAME III:

1. The dealer applies the ₹1.5 lakh discount upfront on the invoice. You don't pay it and claim it back.
2. The dealer files the FAME claim post-sale through the new IFAME portal. The reimbursement comes back to the dealer, not you.
3. If a dealer asks you to "pay the full amount and claim it back from the government" — walk out. That is not how FAME III works and it's a known scam pattern from the FAME II era.

You will need to provide PAN, Aadhaar, and a buyer declaration that this is your first FAME-claimed vehicle in the last 12 months. The "one FAME claim per family per year" rule is back from FAME II.

State-level top-ups still apply

FAME III is the central scheme. Maharashtra, Gujarat, Telangana, Delhi, and Tamil Nadu all run state-level EV policies on top. The math now (Maharashtra example):

• Central FAME III: ₹1.5 lakh
• Maharashtra EV Policy: ₹1 lakh + road tax exemption (~₹40,000-₹80,000 depending on car)
• Total potential discount: ₹2.7 lakh - ₹3.3 lakh on a ₹15 lakh on-road EV

That's a 20-22% discount on a popular SUV in the right state. Combined with the lower running cost, the 3-year cost of ownership of a Nexon EV in Maharashtra is now genuinely lower than the petrol Creta. That's a milestone moment for EV adoption in India and the underlying reason the Heavy Industries ministry pushed FAME III through.

If you've been waiting on a purchase, talk to the dealer this week. Some are still calculating the new pricing into their invoice systems and there's a good chance of getting last-week's lower on-road quote applied to a delivery this week before they update.