India and the United States are poised to collaborate in expediting New Delhi's shift towards electric public transportation systems in alignment with its net-zero objectives. This move signifies the deepening trade and political relations between the two nations, aiming to counterbalance China's influence on the global stage. Under a proposal currently undergoing inter-ministerial discussions, the US plans to provide $150 million (approximately Rs 1,250 crore) to establish a fund that serves as a payment assurance for companies supplying electric buses to struggling state transport undertakings (STUs). Negotiations are underway between both parties to finalize the specifics of this financial mechanism.

The initiative aims to expedite the adoption of electric mobility in India, a country housing some of the world's most polluted cities. Upon Cabinet clearance, the government intends to release multiple tenders for approximately 50,000 electric buses. These buses are slated to be deployed over a span of five years as part of the National Electric Bus Programme (NEPB), forming a larger strategy to reduce expensive crude imports and diminish vehicular pollution.

A senior government official mentioned, "We're in the final stages of discussions to establish a payment security mechanism for the transition from old, polluting diesel buses to electric ones. The proposal is undergoing inter-ministerial consultations and is slated for cabinet approval. The electrification of buses holds high priority for the government due to its significant social and environmental impact".

This proposal coincides with Commerce and Industry Minister Piyush Goyal's visit to the US, where he is scheduled to meet Tesla CEO Elon Musk to finalize details regarding the American electric car manufacturer's plans for its inaugural factory in India. Additionally, US President Joe Biden's upcoming visit to New Delhi in January, as the chief guest at Republic Day celebrations, is anticipated to further bolster bilateral relations.

The government's objective has been to replace outdated, polluting diesel buses with electric ones under NEPB, primarily addressing concerns about heightened vehicular pollution in urban areas. However, the previous tender for 4,675 electric buses, initiated by state-owned Convergence Energy Services Ltd (CESL) in January 2023, encountered obstacles when established automakers refrained from bidding due to the absence of payment assurances. "The implementation of the payment security mechanism will follow the necessary approvals. Subsequently, the government will initiate new tender processes".