Govt makes EVs default choice for staff cars, sets ₹20 lakh procurement cap

Government departments should ordinarily replace retiring staff cars with EVs under revised procurement rules. The move supports India’s climate and energy goals, though EVs made up just 0.63% of government vehicles in 2022.

New Delhi: The finance ministry has made electric vehicles (EVs) the default choice for government staff cars, signalling a shift away from petrol and diesel vehicles in official fleets as India seeks to cut oil imports and transport emissions.

In a notification issued on Tuesday, the department of expenditure said ministries and government departments should ordinarily procure EVs when replacing or retiring their existing internal combustion engine (ICE) staff cars. Departments seeking to buy an ICE vehicle instead will have to justify the decision through a detailed proposal to the expenditure department. A senior government official confirmed the development to Mint.

The move is aimed at promoting electric mobility, reducing dependence on fossil fuels and taking into account prevailing vehicle prices and lifecycle costs, the notification, seen by Mint, said. The government has also set a procurement ceiling of ₹20 lakh for electric cars, higher than the ₹10 lakh limit for ICE and hybrid vehicles.

The decision comes as India seeks to become a net-zero carbon emitter by 2070. Transport accounts for 12% of the country's carbon emissions, according to the International Energy Agency (IEA). The shift to EVs could also help reduce India's dependence on imported oil, with the country meeting about 90% of its oil requirements through imports. It may also help curb vehicular pollution.

“Making EVs the default for government staff cars is a welcome step. Zero-emission vehicles cut tailpipe pollution, keep India’s auto industry competitive as global markets electrify, and reduce our reliance on imported oil,” said Amit Bhatt, India managing director of the International Council on Clean Transportation, a global think tank. The government is leading by example, he said.

However, government fleets have so far seen limited EV adoption. A 2022 Lok Sabha disclosure showed that of 847,544 government vehicles, only 5,384 were electric, accounting for 0.63%. The EV share was 0.58% in Union government fleets and 0.31% in state government fleets.

The revised Staff Car Rules govern the purchase, control, maintenance and use of official vehicles assigned to government ministries, departments and public sector enterprises.

Email queries and calls to the department of expenditure spokesperson seeking confirmation and comment had not received an immediate response.

EV push

In May this year, the government's demand aggregation agency, Convergence Energy Services Ltd (CESL), announced an EV-as-a-service model for central and state governments and their public sector enterprises to encourage adoption across official fleets. The initiative came amid efforts to promote electric mobility following the oil shock triggered by the West Asia conflict.

India is already a major market for electric mobility. It is the world's largest market for electric three-wheelers and the second-largest for electric buses and two-wheelers, according to the IEA's Global EV Outlook 2026, based on 2025 sales.

The country recorded sales of 2.66 million EVs in FY26, up 30% from the previous financial year, according to the government's VAHAN vehicle registration database. India's EV market is projected to grow to $110.7 billion by 2029, from $54.41 billion in 2025, according to market research firm Mordor Intelligence.

Clean vehicles

The government's approach to cleaner vehicles in its own fleet has, however, at times divided the automobile industry. In May 2025, the Commission for Air Quality Management (CAQM), the air quality regulator for Delhi and its surrounding areas, defined clean vehicles as EVs, hybrids, compressed natural gas (CNG) vehicles and flex-fuel vehicles. It urged government departments to procure only clean vehicles.

The move drew criticism from EV manufacturers, who had lobbied against giving hybrids—powered by a combination of an internal combustion engine and an electric motor—the same policy status as EVs, Mint reported on 4 June 2025.

The differences between EV and hybrid vehicle manufacturers had also surfaced when a draft Delhi EV policy proposed equal tax incentives for both powertrains in April 2025.

The final Delhi EV policy, which came into force in July this year, did not provide incentives for hybrid vehicles. Instead, it set deadlines for phasing out the sale of ICE two-wheelers from April 2028 and three-wheelers from January 2027.

About the Authors

Manas Pimpalkhare

Manas is a New Delhi-based journalist with Mint, where he covers the intersection of economic policy, industry, and emerging sectors shaping India’s growth. He writes on government regulation, manufacturing, and the clean energy transition, with particular depth in areas such as electric mobility, battery ecosystems, and rare-earth supply chains. He has written on India’s efforts to build domestic capacity in electric vehicles and energy storage, as well as the broader push to reduce import dependence and strengthen supply chain resilience. His reports are not limited to capturing the headline; they also aim to explain complex policy simply.<br><br>Manas has studied law in Pune, the city where he grew up, followed by a business journalism diploma from the Asian College of Journalism in Chennai. In his almost two years of being a correspondent for Mint, Manas has reported as major wars unfolded, a general election brought surprises for both the ruling party and the Opposition, and three Union Budget announcements where India has charted its economic course for the days to come.<br><br>On vacation, Manas plays bass guitar with his friends in Space & Co, their jam-rock band. He also likes cats, and occasions of late-night snacking.

Dhirendra Kumar

Dhirendra Kumar is a seasoned policy reporter with about 20 years of experience in deep, on-ground reporting across key economic and governance sectors. His work spans finance, public expenditure, disinvestment, public sector enterprises, textiles, trade, consumer affairs, and agriculture, with a strong focus on uncovering structural policy shifts and their real-world impact.<br><br>Kumar has been awarded the Chaudhary Charan Singh Award for Excellence in Journalism in Agricultural Research and Development, recognising his contribution to reporting on critical issues in the farm sector. He has also been a recipient of a fellowship in international trade from the National Press Foundation, which has further strengthened his coverage of global trade dynamics and their implications for India.<br><br>Kumar is known for breaking complex policy developments into clear, accessible stories. His reporting focuses on uncovering under-reported trends, explaining policy shifts, and helping readers stay informed about developments that shape India’s economic landscape.