Impact of Electric Vehicles Adaption on the Balance of Payment and Current Account Deficit in India

Abstract

One of the major problem faced by the Indian Economy is a balance of payment. India is always having the Current Account Deficit (USD 7.6 billion Q3 2020). This is because of the large presence of crude oil in the import basket of the nation. The lion share of the petroleum used by the transportation sector. India imports 96% of its oil consumption. The current electric vehicle penetration of the market is around 5 % in India. This paper tries to find out the effect on the balance payment and current account if half of the transportation sector is converted to the electric segment especially bikes, Cars, utility vehicles (UVs), and three-wheelers. This research trying to find out whether electric vehicles can make a huge impact on India’s sustainable development and balance of payment of the nation and also find out whether it will be a huge burden on the Electric Grid.