India's Electric Bus Boom Needs Better Financing, Charging Infrastructure

By Shubhangi Bhatia

What?

India's electric bus sales are growing steadily, with 5,412 buses sold in FY26, up about 35% from the year before. The market has recorded a compound annual growth rate of 46% between 2015 and 2025, making India one of the “fastest-growing” electric bus markets in the world.

But the current pace is still "much lower,” according to ICRA.

And almost all of this growth is coming from government tenders, not private companies. Out of roughly 17,500-19,500 electric buses on Indian roads, state transport bodies (STUs) own nearly all of them. Private operators run 85-90% of all buses in India, yet they have barely started buying electric ones.

"For the industry, private adoption is negligible," said Mahesh Babu, CEO of Olectra Greentech.

Why?

The problem is that the financing does not work for the private operators yet.

Electric buses cost 1.4 to 1.8 times more than diesel buses, often Rs 90 lakh to Rs 1.2 crore compared to Rs 43-45 lakh for diesel. To make the monthly payments manageable, loans need to run for about seven years. But banks are used to lending for only three to five years on diesel buses, and there is no resale market yet for electric buses, so lenders have less to fall back on.

They are not able to run it, Babu said, referring to operators stuck with higher interest rates and shorter loan terms.

Government-run buses do not face this problem because of a system where the government guarantees payment per kilometre run, no matter how many passengers ride. That gives banks confidence to lend. Private operators get no such guarantee, and most government subsidy schemes are also built around STUs.

Charging adds another layer of difficulty. For intercity operators, the problem runs further, as buses often need to travel farther than a single charge allows, and highway charging infrastructure is still catching up.

Still, demand is picking up in pockets. Corporate staff transport is one bright spot. "A lot of players of staff buses are approaching us in a big way because they are also focused on ESG, and TCO (total cost of economics) parity; they are able to find value in that," said Ganesh Mani, CEO of Switch Mobility.

What Next?

New rules could force faster change. Delhi's Electric Vehicle Policy 2026 and a clean fuel mandate starting November 2026 may require 30% of Delhi's school buses to go electric by 2030, which Crisil's Hemal Thakkar says would be the first such rule aimed squarely at private fleets.

With better loan options for private operators reportedly being considered, battery prices falling, and a leasing model some say could finally make the math work, the pieces for a private-sector shift may fall into place.

So, is India's electric bus story about to move beyond government fleets?

Elon's new company is private. These 3 tickers aren't.

The next Apple may already exist. Insider sources say Elon has spent two years building a secret device inside Tesla's facilities — one he claims will be "10x bigger than the largest product in history."

There's just one problem: the company is private, and unless you know Elon personally, you can't buy a single share. That was true until Guardian's research team found three public ticker symbols sitting in the launch supply chain.

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You won't hear these names on CNBC — Wall Street hasn't published a word on the connection. But when the launch hits September 21, that quiet ends.

Some are already calling this the biggest opportunity since AI. For anyone who missed Apple before the iPhone, this may be a second look at that kind of setup.

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Rs 44 lakh crore

That’s how much revenue 18 large states are expected to cross this fiscal, with growth projected at 9-11% year-on-year, according to Crisil Ratings.

The states account for more than 90% of India’s gross state domestic product.

By The Numbers: GST and tax devolution from the Centre will drive the increase. GST accounts for around 40-45% of states’ own-tax collections.

"We expect states' GST revenue to rise 12-13%, supported by resilient domestic consumption and robust import-linked collections," said Anuj Sethi, Senior Director, Crisil Ratings.

In the five months ended August 31, states’ GST revenue grew 16% year-on-year, aided by nearly 30% growth in IGST collections from imports.

Forecast: Tax devolution is expected to rise 11-12%, supported by a rebound in personal income-tax collections and stronger nominal economic growth.

Overall own-tax revenue is projected to grow 9-10%, while grants-in-aid and non-tax revenue are expected to rise 6-7% and 9-10%, respectively.

The improvement will not be uniform across states and will depend on revenue mix, tax buoyancy and compliance with grant-linked conditions. Crisil assumes nominal GDP growth of around 13% in fiscal 2027.

Tata Feud: Pawar Sides With Trusts

Sharad Pawar, veteran NCP (SP) leader and former Maharashtra chief minister, has backed Tata Trusts' position in its escalating dispute with the Tata Sons board. He said the Trusts' majority ownership was deliberately designed to ensure business wealth funds public welfare, and argued that their nominee directors should have a decisive say in key decisions.

"The Articles of the Group give the majority owner's nominees a decisive voice in choosing the Chairman, and that agreement should be respected," he said. Pawar also called for the dispute to be resolved through dialogue and due process.

The Backdrop: Noel Tata, chairman of Tata Trusts and a member of the Tata family, has proposed exploring a restructuring of Tata Sons, including potentially splitting the holding company into multiple entities, as an alternative to listing it on the stock market.

How We Got Here: The proposal follows the RBI’s decision to reject Tata Sons’ request to surrender its registration as an upper-layer NBFC, leaving the company facing stricter regulatory requirements, including a potential listing.

The Lead: The dispute has also widened over leadership. The Tata Sons board voted 4-1 to reappoint N Chandrasekaran as chairman for another five years, but Noel opposed the move. Tata Trusts, which owns about 66% of Tata Sons, says the resolution is invalid under the company’s Articles of Association.

As Govindraj Ethiraj argues in The Take, the dispute comes as Tata Sons makes large bets on semiconductors, Air India and digital businesses, raising questions over disclosure and the commercial outcomes of those investments.

India Faces Fresh Oil Pressure

India’s oil problem is deepening, with a Saudi pipeline outage adding fresh pressure on fuel supplies just as New Delhi faces renewed US pressure over Russian crude, reported Bloomberg.

Context: The immediate disruption may prove temporary. Saudi Arabia is expected to restart its East-West Pipeline, an important alternative to the Strait of Hormuz, though restoring full capacity could take weeks.

The bigger challenge is Washington’s renewed threat to penalize countries buying Russian oil. India, the largest buyer of seaborne Russian crude, could face significant pressure if the US imposes tariffs on Russian-oil purchasers.

Forecast: During the early weeks of the Middle East conflict, India avoided severe cooking-fuel shortages through alternative imports, diplomacy and production changes.

But replacing Russian barrels comes at a cost. Indian refiners are considering cutting Russian crude purchases by as much as half in the near term.

The underlying problem is not a lack of oil but disrupted trade flows. Russian barrels could move to China, while other suppliers fill India’s gap.

SpiceJet Under Scanner

India's aviation ministry has placed SpiceJet under operational and financial scrutiny, Civil Aviation Minister Ram Mohan Naidu said on Tuesday, as the carrier's long-running cash flow troubles have been worsened by the West Asia conflict, as reported by Reuters.

The government said it was closely monitoring SpiceJet through the aviation regulatory body to ensure safety is not compromised.

Context: SpiceJet was once India's second-largest domestic carrier by market share in 2019 but has since struggled with thinning market share, rising fuel costs and intense competition.

Earlier this year, Reuters reported that the airline was actively seeking government funding after delaying salary payments to its pilots.

The government has extended the Emergency Credit Line Guarantee Scheme to SpiceJet, under which the carrier has received Rs 1.5 billion ($15.67 million) in support.

Critical Moment: Naidu acknowledged there were limits to how far the government could intervene in a privately run business.

The scrutiny comes amid heightened attention on aviation safety in India following recent industry disruptions, with regulators keen to ensure financial stress at airlines does not spill over into operations or passenger safety.

H-1B Shock Continues

The US has extended a controversial $100,000 payment requirement for certain H-1B workers for another year, keeping the restriction in place until September 21, 2027. 

Context: The Trump administration first introduced the measure in September 2025, arguing that it would curb employers’ reliance on lower-paid foreign workers and push companies towards higher-skilled, higher-paid hiring.

Impact: The extension matters for Indian professionals because India is the largest source of H-1B workers. However, the $100,000 payment does not apply to every H-1B holder. It primarily targets certain workers outside the US who need H-1B admission to begin a job. Existing H-1B workers generally do not have to pay it when renewing their status.

The policy also remains tied up in court. A federal judge struck down the payment requirement in June, and an appeals court declined to pause that ruling. So while the administration has extended the restriction, its enforceability remains uncertain as litigation continues.

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Iran Makes Fresh Overture For Peace

On Episode 987 of The Core Report, financial journalist Govindraj Ethiraj talks to Rajiv Batra, Head of Asia & Co-Head of Global Emerging Markets Equity Strategy and Chief India Equity Strategist at J.P. Morgan as well as Nikhil Dubey, Senior Research Analyst, Refining & Modeling at Kpler.

• Iran Makes Fresh Overture For Peace Even As UN General Assembly Kicks Off In New York

• JP Morgan Chief Says Indian Govt Should Not Allow Companies To Use Regulation To Block Competition

• Indian Markets Slide On Weak Support And Continuous Liquidity Pressure From IPOs

• Why Global Investors Are Preferring Midcaps And What Is Keeping Them Away From Large Caps

• Will India Be Affected By The Global Diesel Shortages?