Imagine living in a country where everyone has access to clean, affordable public transportation to reach their jobs, schools and health care needs without relying on polluting fossil-fuels. That vision isn’t too far from where India hopes to be by 2047.With an urban population of more than 470 million, India has set an ambitious goal of becoming energy independent by its 100th year of independence. This goal is not just about becoming self-sufficient for its energy needs, but ensuring it’s done in a way that reduces climate-harming emissions and becomes increasingly reliant on clean energy sources. Around 60% of India’s 1.4 billion population is expected to live in its cities by 2050, and with more than one in four people using buses daily, one key way to achieve energy independence is by expanding bus networks into India’s smaller cities.India currently faces a major shortfall in urban bus services, especially in smaller cities. The Ministry of Housing and Urban Affairs recommends 60 buses per 100,000 people, yet many cities have fewer than 10. Nationally, only about 47,650 buses serve its urban residents. Nearly 61% of these are concentrated in just nine megacities (like Delhi and Mumbai), which represent only a quarter of India’s urban population. In contrast, cities with populations between 300,000 and 4 million remain largely underserved, with many lacking organized public bus systems. Closing this gap is critical to ensure that growing cities outside of megacities, have access to reliable, inclusive and sustainable transit.Well-established electric bus networks, which can complement the country’s rail networks and citywide metro systems, can play a massive and cost-effective role. Expanding electric buses to smaller cities will help India meet its goal to be energy independent by 2047. Photo by WRI India. Why Electric Buses — and Why NowIndia’s government first announced financial support to cities for over 20,000 buses in 2021 as a part of its Union (national) budget. However, at the time, this support was limited to the procurement of traditional gas- or diesel-fueled buses due to lower operational costs in 2021. Among India’s transport sector, which consumes nearly 70% of India’s diesel, buses already account for nearly 10% of it.As lower costs were realized in electric bus operations, a new strategy was adopted in August 2023 by India’s Ministry of Housing and Urban Affairs that prioritized electric buses with equity, sustainability and efficiency of India’s bus system. The PM-eBus Sewa Scheme allocated $2.4 billion to deploy and operate 10,000 electric buses across 169 cities. This program also extends beyond the typical one-time financial assistance for bus purchases and assists with operational costs for 10 years as part of a public-private partnership model that includes bus depots and behind-the-meter power infrastructure.India’s government then approved the scheme in September 2024, which included incentives for more than 14,000 electric buses across nine major cities with populations exceeding 4 million people.Currently, 10,000 e-buses have been deployed in more than 50 cities and 20,000 electric buses are in various stages of procurement. This brings the current commitment to 30,000 electric buses, a significant step toward cleaner urban transport. To fully realize India’s 2047 vision for energy independence and sustainable mobility, continued expansion and strategic deployment of an even larger electric bus fleet will be crucial, particularly in bridging service gaps in smaller cities. Buses crowd into a Bengaluru station during morning rush hour. Sixty-one percent of India’s buses serve just nine megacities. Photo by iStock. To develop a more inclusive and effective electric bus program, emerging economies can learn from India’s experience in expanding electric bus networks to smaller cities while balancing developmental and sustainability goals:Creating Inclusive AccessProblem: In India and many developing countries, infrastructure investments tend to concentrate in the largest cities. While this may improve conditions within those metros, it can deepen disparities with smaller urban areas that receive less attention.Solution: By targeting underserved smaller and medium-sized cities, resources can be divided more equitably. For example, the PM-eBus Sewa Scheme promotes more geographically balanced economic development and expands access to essential services.Research shows that countries with a strong system of secondary cities tend to experience lower regional disparities — and higher national productivity — offering lessons for fast growing nations like India. Another way to apply an equity lens to transit investments is by looking at economic opportunities for women. Women make up 48% of the population in cities eligible under the PM-eBus Sewa Scheme yet often face limited transportation options. Electric buses offer safer, cleaner and more affordable mobility.To reassure the safety of public buses and encourage more female ridership, operator contracts now include a minimum target of 25% female representation in the workforce. As one female electric bus driver from Mumbai noted: “If a woman is driving an e-bus, then more women passengers are encouraged to travel by the bus.”The initial rollout of 10,000 electric buses is estimated to generate between 45,000 and 55,000 new jobs. Greater gender parity among electric bus staff can also broaden women’s employment options while improving rider confidence — especially for women who travel alone.Extending Financial Support to Operational ExpensesProblem: Cities often struggle to cover the operational expenses required for reliable electric bus service. In fact, many public transit agencies struggle to recover full operating costs.Solution: Extending grants to cover operating costs was a key part of the success behind the PM-eBus Sewa Scheme. It extended financial support beyond capital expenditure to include operational expenses, infrastructure upgrades such as charging stations and technological platforms for smoother operations. This resulted in more efficient and reliable bus networks, while ensuring sustainability of their long-term operations.Reducing Financial RisksProblem: Many bus operators are small — owning fewer than 100 vehicles — and have lower credit ratings, which translates to higher interest rates, higher costs and the potential of payment defaults. Under the current Gross Cost Contract model, operators bear the burden of upfront capital cost of electric buses for public transit agencies with monthly payments.Solution: Extending payment security mechanisms can boost the confidence to bus operators and manufacturers that they’ll receive timely payments from public transit agencies. The PM-ebus Sewa Scheme introduced a Payment Security Fund that will make interim payments through an implementing agency in case of defaults by the public transit agencies.Building Institutional CapacityProblem: The nationwide rollout of electric buses is a significant undertaking requiring collaboration across departments, ministries, transportation authorities and private stakeholders. New tools, skills and capabilities, due to the nascent stage of the industry, will be needed. Meanwhile, it’s further challenged by the varying levels of knowledge and awareness throughout the government.Solution: Capacity building and knowledge sharing focused on how to address new technologies, maintenance and infrastructure upgrades should be prioritized in the development and implementation of electric bus programs. Developing standards can help streamline this work. WRI India collaborated with the government of India to develop the PM-ebus Sewa Scheme, establishing guidelines for deployment and a framework for demand aggregation to ensure uniform bus specifications, data standards, operational performance, procurement processes, payment guarantees, infrastructure evaluation, and safety standards. A project management unit within the Ministry of Housing and Urban Affairs was also created to implement and monitor the program, along with a dedicated team with specialized expertise that will facilitate smoother and more efficient roll out of the electric buses over the next two years, paving the way for expansion of the program beyond 2026. Electric buses are lined up at a charging station in Lucknow, India. The initial rollout of 10,000 electric buses as part of the PM-ebus Sewa Scheme is expected to generate between 45,000 and 55,000 new jobs. Photo by WRI India. Why Expanding Electric Bus Networks in Smaller Cities MattersCities like London, Hong Kong, Curitiba and Bogota show how prioritizing buses can create efficient, low-carbon urban transport. For India and other countries, investing in electric buses — especially beyond major cities — is a way to meet both development and climate goals.In India, deploying more electric buses — especially in its smaller and medium-sized cities — is poised to improve accessibility for 134 million people across 169 cities. These are cities that have historically lacked organized, affordable and clean public transit options. The adoption of electric buses will reduce dependence on fossil fuels and could reduce millions of tons of emissions over a decade, based on lifecycle estimates. Moreover, expanding the public transport network will grant better access to education, health services and jobs — outcomes that matter most in smaller urban areas where walkability and job density are lower.However, the successful adoption of electric buses on a nationwide level requires concerted efforts that overcome challenges including financing, declining transit ridership, and grid resiliency and capacity.In countries like India, where a majority of buses are owned by small-scale operators owning less than 100 buses, the higher cost of electric buses poses financial hurdles. Solutions could include demand aggregation to take advantage of economies of scale while purchasing electric -buses and establishing more conducive financing and lending ecosystems for small operators.In addition, the mere deployment of more buses will not be enough. With public transit ridership remaining stagnant globally over the past decade, cities must leverage technology and data to improve planning, routing and scheduling of buses to improve reliability and encourage behavior change among passengers. Moreover, bus network expansion must be paired with improved last-mile connectivity, including safer pedestrian infrastructure and better street design — especially in smaller cities, where these supporting systems are often weakest.Lastly, an increase in electric buses means an increase in electricity demand. However, India is still largely dependent on fossil fuels for its electricity generation, with only 25% of its electricity produced from non-fossil fuel sources. As a result, while electric buses play a critical role in reducing tail pipe emission, to ensure a reduction in total emissions, a larger part of the electric grid must be fueled by renewable sources, a transition process that is still likely to take decades. The Road AheadOver the past three years, India has laid the foundation to scale electric bus adoption. The PM-eBus Sewa Scheme advances cleaner, more inclusive mobility by focusing on underserved cities, women’s employment and long-term reforms.To deliver on its promise, continued investment in planning, grid upgrades and local capacity is essential — ensuring electric buses support both development and climate goals. WRI India, in an effort to continue this momentum, is working to expand the scheme to 50,000 electric buses nationwide by 2027. To truly reshape India’s mobility landscape, this expansion must continue to focus on smaller cities — where the gaps are greatest and the opportunity for inclusive development is the strongest. With the right mix of policy, investment and local capacity, India’s electric bus transition can redefine public mobility — not only for megacities, but for every city on its growth journey.