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Two-Wheeler Loan Subsidies: Government Schemes and Benefits Explained

May 21, 2025

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Owning a two-wheeler in India has become more accessible thanks to various government loan schemes and subsidies. These initiatives aim to promote affordable transportation and encourage the adoption of electric vehicles. Let's explore the different schemes and bike loan subsidies available across India.

National Schemes

1. FAME II Scheme

The Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME II) scheme is India's flagship initiative for promoting electric mobility.

Key Features:

Subsidy of up to ₹10,000 per kWh for the first 10 lakh buyers
Additional incentives for scrapping old vehicles (up to ₹7,000)
Buyback schemes (up to ₹12,000)
Total budget allocation of ₹10,000 crore
Aims to support 7,000 e-Buses, 5,00,000 e-3 Wheelers, 55,000 e-4 Wheeler Passenger Cars and 10,00,000 e-2 Wheelers

2. Electric Mobility Promotion Scheme (EMPS) 2024

EMPS 2024 focuses on boosting the adoption of electric two-wheelers (e-2W) and three-wheelers (e-3W) for commercial use.

Key Features:

Subsidies of up to ₹10,000 per kWh for e-2Ws
Up to ₹25,000 for small e-3Ws
Up to ₹50,000 for large e-3Ws
Promotes development of the EV manufacturing industry
Aligns with the vision of Atma Nirbhar Bharat

State-Specific Schemes and Subsidies

Two wheeler loan subsidies and incentives vary significantly from state to state. Here's a snapshot of some state-specific offerings:

State	Subsidy Amount	Additional Benefits
Delhi	Up to ₹30,000 for e-2W	Road tax and registration fee waiver
Maharashtra	Up to ₹25,000 for e-2W	25% subsidy on first 10,000 vehicles
Gujarat	Up to ₹20,000 for e-2W	Registration fee waiver
Tamil Nadu	50% of cost or ₹25,000 (whichever is less)	Specific scheme for working women
Karnataka	15% of vehicle cost or ₹10,000	Road tax exemption

Tamil Nadu: Amma Two-Wheeler Scheme for Working Women

This scheme is designed to empower working women in Tamil Nadu.

1. Eligibility Criteria:

Native and residing in Tamil Nadu
Aged between 18-40
Valid two-wheeler or learner's license
Annual income ≤ ₹2,50,000

2. Benefits:

Subsidy of up to 50% of vehicle cost or ₹25,000 (whichever is less)
Applicable for gearless/auto-geared two-wheelers with engine capacity ≤ 125cc

Impact of Two-Wheeler Loan Subsidies

Reduced loan burden
Lower interest rates in some cases
Tax exemptions (e.g., road tax waivers)
Potential insurance premium benefits for electric two-wheelers

Sample Calculation:

For an electric two-wheeler costing ₹1,00,000 under the FAME II scheme:

Battery capacity: 2 kWh
Subsidy rate: ₹10,000 per kWh
Total subsidy: ₹20,000

This subsidy significantly reduces the overall cost, making the two-wheeler more affordable.

Final Thoughts

Two-wheeler loan subsidies and government loan schemes provide substantial loan benefits for Indian buyers. These initiatives make bike ownership more accessible and affordable, particularly for electric vehicles. The combination of national schemes like FAME II and state-specific subsidies offers a range of options for potential buyers.

Ujjivan SFB offers Chakra Loan - a two-wheeler loan that's designed to offer maximum convenience, including ease of application, competitive interest rates, financing up to 95% of the on-road price of the vehicle and more.

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FAQs

1. What is the FAME II scheme?

FAME II is a government initiative offering subsidies for electric vehicle purchases, including two-wheelers.

2. How much subsidy can I get under FAME II for an electric two-wheeler?

Up to ₹10,000 per kWh for the first 10 lakh buyers.

3. Are there state-specific subsidies for two-wheelers?

Yes, many states offer additional subsidies and benefits for two-wheeler purchases, especially electric models.

4. What is the Amma Two-Wheeler Scheme?

It's a Tamil Nadu government scheme offering subsidies for working women to purchase two-wheelers.

5. Can I avail both central and state subsidies for my two-wheeler purchase?

In most cases, yes. Central schemes like FAME II can be combined with state-specific subsidies.

6. Are there any tax benefits for purchasing an electric two-wheeler?

Many states offer road tax exemptions for electric two-wheelers

7. What documents are typically required to apply for two-wheeler loan subsidies?

Usually, proof of identity, address, income, and vehicle purchase documents are required.

8. Do all two-wheelers qualify for government subsidies?

No, subsidies are often specific to electric or low-emission vehicles

9. How do I apply for two-wheeler loan subsidies?

Application processes vary by scheme. Check with your state's transport department or authorized dealerships.

10. Can I get a subsidy if I've already purchased a two-wheeler?

Generally, subsidies are applicable at the time of purchase. Retroactive claims are usually not accepted.

Disclaimer

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Two-Wheeler Loan Subsidies: Government Schemes and Benefits Explained