India’s Department of Expenditure (DoE) has made electric vehicles (EVs) the standard choice when central government departments replace staff cars, setting a ₹20 lakh cap, twice the limit for petrol, diesel and hybrid cars.
The DoE, part of the Ministry of Finance, issued the memorandum on Tuesday, Nov. 10, and made it effective immediately. It covers purchases and hiring by central ministries and departments, setting net dealer price ceilings of ₹20 lakh (₹2 million) for EVs and ₹10 lakh (₹1 million) for internal combustion engine (ICE) vehicles, including petrol, diesel and hybrid models.
Ministries should ordinarily select an EV when retiring or replacing an ICE staff car. If a department considers EV procurement or deployment impractical and proposes buying an ICE vehicle, it may ask the DoE for a case-by-case relaxation. Each request must explain why an EV is impractical and receive sign-off from the relevant ministry or department secretary and agreement from its Financial Adviser.
For hired cars, the 2026 memorandum characterizes the Sept. 1, 2022, instructions as requiring EVs. If a department proposes hiring an ICE vehicle, it may ask the DoE for a case-by-case relaxation with the same approvals. The 2022 compendium itself said ministries may aim to replace certain contractor-hired petrol and diesel cars in Delhi with EVs and may consider EV contracts when existing agreements end. It did not establish a general hiring mandate; the scope of any later instruction is unverified because the 2026 memorandum cites subsequent guidance without detailing it.
For purchases, the new order partly modifies a staff-car compendium dated Sept. 1, 2022. That document set a ₹6 lakh net dealer price ceiling for purchases listed on the Government e-Marketplace. The 2026 memorandum refers to later instructions but does not say what ceiling applied immediately before the new limits.
In explaining the limits, the DoE cited wider use of electric mobility and reduced dependence on fossil fuels. It also said current vehicle prices and lifetime costs informed the ceilings. Other staff-car terms remain in force, and purchases continue under the General Financial Rules, 2017, as amended.
The memorandum sets no purchase target, spending or savings estimate, or review date. Departments seeking an exception must submit their requests to the DoE for case-by-case consideration.
