Govt Committee Gives Clean Chit To Hero Electric, Okinawa Autotech In FAME Violation Case

A Ministry of Heavy Industries committee has given clean chit to Hero Electric and Okinawa Autotech of any breaches of the phased manufacturing programme (PMP) guidelines under the FAME II Scheme.

As per Business Today’s report, citing government sources, this follows a comprehensive assessment of the companies’ activities.

The committee’s decision gives both the two-wheeler manufacturers a sigh of relief who have been under scanner for purported misuse of government subsidies.

Earlier, it was reported that the government aims to reclaim approximately INR 155 Cr from Hero Electric, INR 125 Cr from Okinawa and INR 50 Cr from Benling.

Disbursements of subsidies under the program were tied to a phased manufacturing program (PMP), designed to boost local production over time. The government claimed that certain companies failed to comply with the PMP yet continued to benefit from FAME subsidies, thereby undermining the scheme’s objectives.

Interestingly, it was also reported earlier that the government was considering legal action against Hero Electric, Okinawa Autotech and Benling India for not repaying the subsidies they wrongly obtained under the FAME scheme,

Following unsuccessful attempts by the Ministry of Heavy Industries to recover the disputed amount from these companies, the decision to pursue legal action had been taken.

The government is expected to recover approximately INR 155 Cr from Hero Electric, INR 125 Cr from Okinawa and INR 50 Cr from Benling. Among the list of companies accused of wrongfully claiming subsidy amounts, Hero Electric, Okinawa Autotech, and Benling India rank among the top defaulters.

The government’s plan to recoup incorrectly obtained subsidies by electric vehicle (EV) manufacturers under the FAME Scheme is underway. The Ministry of Heavy Industries had initiated the verification process to determine the extent of subsidy utilised by EV two-wheeler manufacturers who failed to meet the specified localization requirements mandated by the government for subsidy eligibility.

Under the FAME-II scheme, domestic EV manufacturers can provide a discount of up to 40% on vehicle costs, reimbursable by the government as a subsidy. However, to qualify for the subsidy, manufacturers must ensure that at least 50% of their products incorporate locally manufactured components.

Following complaints regarding manufacturers’ non-compliance with FAME-II regulations, the Indian government began investigating the issue in 2022.