Government incentives have been vital to electric-car adoption in the many countries that have enacted them so far.

Offering cash or tax reductions for buying electric cars, or offering perks like parking or carpool lane access, can go along away toward getting hesitant buyers over the hump.

Now, India is trying to do just that with a national program of electric-car incentives.

DON'T MISS: Mahindra Reva e2o: Living With India's Most Modern Electric Car (Dec 2013)

Announced in mid April, the FAME (Faster Adoption and Manufacturing of Electric vehicles) program will subsidize the purchase of new hybrid and electric cars, as well as other vehicle types.

It specifies incentives of up to 29,000 rupees ($457) for scooters and motorcycles, and up to 138,000 rupees ($2,177) for cars.

Three-wheeled vehicles, light commercial vehicles, and buses will be eligible for incentives of varying amounts as well.

Mahindra e2o electric car

Mahindra e2o electric car

One model expected to greatly benefit from the FAME program is the Mahindra e2o--India's first indigenous modern electric car.

Incentives will slash the tiny Mahindra's price by 16 percent, according to Indian Autos Blog.

MORE: Mahindra Reva Halo: Indian Electric Sports Car Debuts In Delhi (Feb 2014)

It currently sells for 571,000 rupees, or about $9,000 at current exchange rates.

That may not seem like a lot compared to the prices of electric cars in the U.S., but Indian buyers aren't exactly getting much for their money.

Mahindra Reva Halo, 2014 Delhi Auto Expo - Image via MotorBeam

Mahindra Reva Halo, 2014 Delhi Auto Expo - Image via MotorBeam

The e2o--previously known as the REVA NXR--is likely one of the smallest production cars in the world.

It's not very fast either--the top speed is just 55 mph.

Its lithium-ion battery pack provides 74 miles of range, and takes about five hours to charge.

ALSO SEE: India Sets Fuel-Economy Rules; Could They Stem Rise Of SUVs? (Feb 2014)

But actually finding a place to charge may be difficult in a country with notoriously unreliable infrastructure.

India's grid is also one of the dirtiest in the world, eroding the environmental benefits of electric cars.

Yet FAME may be the first of many green policies as the Indian government works to curtail emissions from its vital transportation sector.

Indian traffic [Image: Flickr user Peter Eich]

Indian traffic [Image: Flickr user Peter Eich]

Last year, it unveiled Corporate Average Fuel Consumption (CAFC), a set of mandated fuel-economy standards that are similar to the U.S. Corporate Average Fuel Economy (CAFE) standards.

CAFC calls for a 14-percent increase in fuel efficiency beginning in 2016.

It's still unclear whether India will add credits for the manufacture of zero-emission vehicles, or mandate the sale of a certain number of zero-emission vehicles, as California has done since 2012.

That could be another important way to boost the number of electric cars on India's roads, along with making them cheaper for consumers to buy.


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