The Ministry of Heavy Industries is in discussions with the Department of Financial Services to develop a dedicated financing mechanism for electric buses (e-buses) and electric trucks (e-trucks), aiming to accelerate adoption among private operators.
According to sources, the Small Industries Development Bank of India is likely to play a key role in designing the framework, which would facilitate easier credit flow to the sector. SIDBI operates under the DFS and focuses on financing and development of small and medium enterprises.
The initiative comes amid the government’s broader push to expand electric mobility, particularly as rising crude oil prices—linked to ongoing tensions in West Asia conflict—increase pressure to reduce fuel imports.
Currently, financing for electric commercial vehicles remains constrained due to limited participation by banks and non-banking financial companies (NBFCs). Lenders have been cautious because of stringent credit norms, uncertainties around asset performance, and the relatively new nature of electric vehicle technology.
Another challenge is the fragmented structure of the sector, where a majority of transport operators own small fleets, making it difficult for them to meet traditional lending criteria.
The proposed financing model is expected to address these bottlenecks by introducing mechanisms that reduce risk for lenders and improve access to capital for fleet operators.
If implemented effectively, the move could significantly boost the adoption of electric buses and trucks, supporting India’s goals of reducing emissions and dependence on fossil fuels.
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