New Delhi (India), December 9 : Environment Minister Bhupender Yadav on Saturday asserted that the India-US Payment Security Mechanism (PSM) for e-buses will serve as an incentive for both Indian and international original equipment manufacturers (OEMs) to potentially establish a manufacturing hub in India.
"The India-US Payment Security Mechanism (PSM) for e-buses will serve as an incentive for both Indian and international OEMs/Bus operators to participate in e-bus operations and potentially establish a manufacturing hub in India, contributing to the growth of e-bus industry and e-bus exports," he said at a side event on India- US "Payment Security Mechanism (PSM)" for e buses in India.
To achieve the goal of net zero emissions, the adoption of electric vehicles (EVs) plays a crucial role and given that buses serve the mass public, prioritizing electric buses is essential as a significant mode for decarbonizing the transport sector.
"Decarbonization of the transport sector is essential to reduce the Greenhouse Gas (GHG) emissions and to meet the ambitious target of achieving net-zero emissions by 2070 set by Government of India, Union Minister for Environment, Forest and Climate Change," said Yadav.
However, the Environment Minister stated that this transition to e-buses poses challenges to Public Transport Authorities (PTAs) owing to their high upfront costs and lower realization of revenue from operations.
"PSM scheme represents a comprehensive strategy to address financial uncertainties, fostering widespread and sustainable adoption of e-buses not only within India but also on a global scale", he said.
In June, the United States and India announced plans to create a payment security mechanism that will facilitate the deployment of 10,000 made-in-India electric buses in India.
During an event here, Minister Yadav expressed confidence that this initiative will popularise e-buses.
"The India-US Payment Security Mechanism (PSM) for e-buses will serve as an incentive for both Indian and international bus operators to participate in e-bus operations and potentially establish a manufacturing hub in India, contributing to the growth of e-bus industry and e-bus exports," the minister said.
The initiative will popularise buses by encouraging private sector participation in the procurement and operation of these vehicles for an extended period of 10 to 12 years, fostering their adoption throughout India, he added.
Secretary John Kerry, US Special Presidential Envoy for Climate, speaking on the occasion, said, "with PSM we are taking a major footstep towards helping India electrify its bus fleet."
He said that this move was an Indian solution to maximise the Indian opportunity to decarbonize the transportation sector.
India's existing bus fleet stands at 1.5 million, most of which run on diesel. After a few successful pilots in response to a federal subsidy program, India rolled out a large, unified tender of 5,450 e-buses worth over USD 1 billion and spread across five states. Discovered prices were significantly lower than diesel.
Encouraged by the success, the Government established a target of 50,000 e-buses. A total of 12,000 e-buses in different stages of contracting are now coming onto Indian roads.
The session aimed to discuss a joint US-India collaboration to establish a payment security mechanism to address current constraints. With contributions of USD 240 million from the Government of India and USD 150 million from the US government and their partners, the establishment of the ePSM guarantees delayed payments from the fiscally constrained state bus companies.
The PSM aims to unlock up to USD10 billion in non-recourse lending to e-bus manufacturers in India to deploy 38,000 buses.
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