India's most influential government think-tank has recommended lowering taxes and interest rates for loans on electric vehicles, while capping sales of conventional cars, signalling a dramatic shift in policy in one of the world's fastest growing auto markets.
A draft of the 90-page blueprint, seen by Reuters, also suggests the government open a battery plant by the end of 2018 and use tax revenues from the petrol and diesel vehicle sales to set up charging stations for electric vehicles.
The recommendations in a draft report by Niti Aayog, the planning body headed by Prime Minister Narendra Modi, are aimed at electrifying all vehicles in the country by 2032.
The focus of the report on electric vehicles is a shift from the current policy that incentivises both hybrid vehicles and electric cars.
India's plan to leapfrog hybrid technology comes after China announced aggressive measures last year to push sales of plug-in vehicles including subsidies, research funding and rules to discourage fossil-fuel cars in big cities.
Officials acknowledge the blueprint faces challenges. High battery costs would push up car prices and a lack of charging stations and other infrastructure means car makers would hesitate to make the necessary investment.
"If we accelerate electric vehicle growth it will be a disruption for the auto sector and would require investment, but if we're not able to adapt quickly we risk being net importers of batteries," said a government source involved in the plans. "There has been resistance from car makers."
India's top-selling carmaker Maruti Suzuki has invested in so-called mild-hybrid technology, which makes less use of electric power than full hybrids, while Toyota Motor Corp sells its luxury hybrid Camry sedan in the country. Mahindra & Mahindra is the only manufacturer of electric vehicles in India.
In 2015 India launched a new scheme which offered incentives for clean fuel technology cars to boost their sales to up to seven million vehicles by 2020.
But despite incentives as high as 140,000 rupees ($A2,928) on some cars the scheme has made little progress, with the sales of electric and hybrid cars making up only a fraction of the three million passenger vehicles sold in India in 2016.
