The government has demanded subsidiary amounts totaling ₹249 crore from Okinawa Autotech (₹116 crore) and Hero Electric (₹133 crore) for violations of Phased Manufacturing Programme (PMP) guidelines and complaints received from other companies.

Sources said the Ministry of Heavy Industries (MHI) received complaints about misappropriation of subsidies under the FAME India Scheme Phase II by some electric vehicle (EV) manufacturers. To address these complaints, the Ministry delegated the testing agencies to investigate the matter.

“The MHI has taken serious cognizance of the report and has issued notice on April 29 to both of these companies for debarment from the FAME-II Scheme and the recovery of incentives claimed since FY2019–20 under the FAME II Scheme,” a government official told businessline.


Investigations into the original equipment manufacturers (OEMs) have been completed, and Okinawa Autotech and Hero Electric Vehicles have been found to be non-compliant with the regulations through the rampant use of imported parts in place of local parts in the manufacturing of electric models approved under the FAME-II Scheme, he said.

The official said Ola Electric was also involved, but it has accepted the violation and announced that it will reimburse the price (around ₹130 crore) of the off-board charger to all customers who have bought it as an accessory when purchasing an Ola S1Pro model scooter from FY2019-20 until March 30, 2023.

The official added that regarding various complaints by other companies, the proceedings of the investigation report will be concluded soon, and with respect to the report, the Ministry is committed to ensuring a fair and just outcome for all parties involved.

Sohinder Gill, CEO, Hero Electric, said, “Yes, we have received a letter referring to the bikes manufactured 3 to 4 years ago. We have checked the FAME localisation guidelines in the subject period and find that our bikes fully comply with the CMVR and FAME certificates and their extensions in the subject period. Hence, the question of refund, etc. does not apply.”

“In MHI’s letter, there is no reference to the checks and audits done on our current range of bikes, as they have been done for all other OEMs, and we are awaiting MHI’s report on the results of any investigation carried out on them,” Gill added.

Jeetender Sharma, MD and Founder, Okinawa Autotech, said the company “hasn’t received any notice from the government” to refund subsidies from 2019–20.

“Okinawa Autotech has always adhered to government policies. In fact, Okinawa was the first company in the industry to receive a FAME II certification in 2019. Based on anonymous emails, the government has recently reopened audits for 2020 and 2021 where all companies were importing certain components that weren’t manufactured in India. So, the issue is industry-wide, and the Ministry has all the relevant proofs of all OEMs,” he added.