While Budget 2025 lacks direct incentives for vehicle purchases, it introduces measures that could boost the industry. The income tax exemption has been raised to Rs 1.2 million, potentially increasing disposable income for middle-class car buyers. The government has waived customs duties on 35 EV battery production goods, lowering costs and making EVs more affordable.

The Production Linked Incentive (PLI) scheme for the auto sector has been allocated Rs 28.19 billion, supporting local manufacturing of EVs and hydrogen fuel cell vehicles. Additionally, the Dhan-Dhaanya Krishi Yojana and increased Kisan Credit Card limits are expected to drive rural demand for tractors, two-wheelers, and small commercial vehicles.

MSMEs in the auto supply chain will benefit from easier credit access, enabling component manufacturers and dealerships to scale operations and invest in new technology. Overall, Budget 2025 strengthens India’s automotive ecosystem with tax relief, EV incentives, and rural market support.

Girish Wagh, Executive Director, Tata Motors, commented, “The Union Budget 2025 lays out a clear roadmap for long-term transformation, driving India closer to its vision of a ‘Viksit Bharat’ with progressive policies and reforms that foster modernisation, economic growth, and inclusive development. The continued allocation of over Rs 11 trillion in capital expenditure, alongside targeted initiatives to boost consumption, support ‘Make in India’, and promote agricultural growth, is set to create a more dynamic economic environment. The removal of basic customs duties on key materials for battery manufacturing is a strategic move to boost domestic EV production, foster a sustainable ecosystem, and drive India's transition to a greener economy. As infrastructure projects gain momentum and consumption picks up, improved roads, connectivity, and logistics will undoubtedly drive increased demand for freight and commercial transport solutions driven by both domestic demand and broader economic recovery.”

 

Narayan Subramaniam, CEO & Head- Design, Ultraviolette Automotive Pvt Ltd, remarked, "We are enthused to see the Union Budget 2025-26 prioritising clean technology and domestic manufacturing, especially in the electric vehicle sector. Increased infrastructure investment and incentives for electric mobility will strengthen our efforts to develop eco-friendly mobility solutions. The inclusion of 35 capital goods for EV battery manufacturing in the exemption list is a transformative move, significantly reducing production costs and fostering innovation in lithium-ion battery production. Furthermore, the full exemption on critical minerals like cobalt powder and lithium-ion battery scrap ensures a steady supply of essential resources, thereby boosting local production and job creation in the clean tech sector. As an electric vehicle manufacturer, we are particularly encouraged by the budget's focus on enhancing the domestic production of key components such as batteries, motors, and controllers. This initiative will not only strengthen India's EV ecosystem but also enable us to build a more resilient local supply chain. This budget not only empowers the aspiring MSMEs financially but also encourages the adoption of cleaner alternatives, paving the way for a greener future."

 

Udit Sheth, Vice Chairman, Setco Auto Systems Pvt Ltd, said, “The Union Budget is robust and with the interventions within it will spur multifaceted growth and consumption. Overall this will positively impact our economy, drive logistics and transport activities that will in turn benefit our MHCV sector. Exciting days ahead!”

 

Vikram Mohan, Managing Director, Pricol Limited, commented, "The Union Budget 2025-26 lays a strong foundation for India’s automotive sector, emphasising growth, innovation, and global competitiveness. For Pricol, reduced customs duties on electronic components could provide a boost considering our  large electronics purchasing and consumption in our class of products. We see this budget as an enabler for transforming India into a key hub for high-value automotive electronics oriented manufacturing."

Yatin Gupte, Chairman & Managing Director, Wardwizard Innovations & Mobility Ltd, said, "We welcome the policies stated in Union Budget 2025-26 by the Hon’ble Finance Minister, which gives a strong push towards EV adoption, accelerating the development India’s electric vehicle ecosystem. The reduction in customs duty on lithium and other important raw materials will significantly lower input costs for lithium-ion battery manufacturing, making EVs more affordable to consumers while boosting domestic production. The introduction of a national manufacturing mission for clean tech industries is another commendable move. By strengthening the ecosystem for EV batteries, motors, and controllers, this initiative will accelerate India’s transition to sustainable transportation. The recognition of MSMEs as the ‘2nd engine’ of economic growth in the Union Budget 2025 will boost sectoral confidence. The fiscal policies stated to support MSMEs will have a multiplier effect on various sectors, including accelerating India’s e-mobility revolution. We are confident that the expanded tax bracket will enhance the purchasing power of the middle class, which will positively impact EV industry in India."

Dheeraj Hinduja, Executive Chairman, Ashok Leyland, noted, “The Finance Minister has presented a clear, growth-driven budget that aligns with the Prime Minister’s vision of fostering a competitive and resilient India with inclusive growth by investing in people, economy and innovation. The budget prioritises extensive national infrastructure development and accelerates the digitisation of the economy. Continuous government investments in infrastructure are set to fuel sustained economic growth. Additionally, the government's strong commitment to green mobility is expected to create new avenues for innovation and growth across the country. The launch of the National Manufacturing Mission will support the sector by providing crucial policy backing, execution plans, and a governance and monitoring framework. With strategic investments in skilling, digitisation, healthcare, education, agriculture, and electrification, the budget aims to shape India’s economic trajectory in the years ahead.  Furthermore, it reinforces our commitment to clean energy vehicles, contributing to a greener, cleaner future as part of the national mission to achieve net-zero carbon emissions.”

Shailesh Chandra, President, SIAM, remarked, “We welcome this budget which is focused on long term sustained economic growth. The specific focus on rural prosperity and agriculture, coupled with reforms in the Personal Income Tax, is likely to have a positive effect on the auto industry, and will help in creating demand. As the Auto Industry transits into cleaner powertrains, in line with the Hon’ble PM’s vision on sustainable mobility, it will specifically benefit from the National Manufacturing Mission, which supports clean tech manufacturing for batteries, motors and controllers."

Chandra further commented," The exemption of critical minerals (e.g. cobalt, lead, zinc etc.), scraps of lithium-ion battery, and 35 additional capital goods from customs duty, will help create a strong EV ecosystem in the country. The Export Promotion Mission and support for integration with global supply chains are critical initiatives that will enable Indian manufacturers to expand export footprints, and align with global supply chains. The auto industry is also thankful to the Government for creating a high-level committee for regulatory reforms, aimed at reviewing regulations, certifications, licenses, and permissions, as this will certainly help in ease of doing business in our sector.”

Shreyas Shibulal, Founder and CEO, Numeros Motors India Pvt Ltd, noted, “This year’s Union Budget reaffirms the government’s sincere commitment with ‘National Manufacturing Mission’ to accelerate India’s transition to electric mobility and clean technology manufacturing. The full exemption of customs duties on critical materials such as cobalt and lithium-ion battery waste is a crucial step to empower a robust domestic manufacturing ecosystem. This initiative reduces production costs and enhances our self-reliance, positioning India as a global leader in EV innovation."

Shibulal added, "The introduction of 35 additional capital goods for EV battery manufacturing further underscores the government's vision to localise production and create high-value jobs for our youth. By streamlining the supply chain and encouraging local manufacturing, we can ensure that electric vehicles become more accessible thus enhancing the adoption, thereby accelerating the transition to sustainable mobility. This budget signifies a strategic shift away from traditional subsidies towards a more sustainable growth model for the EV and auto industries. By embracing the 'Make in India' initiative and focusing on self-reliance, we are poised to drive significant growth in EV adoption across India. The emphasis on achieving a 'Viksit Bharat'—a developed India—through enhanced domestic capabilities will not only empower our local industries but also contribute positively to our environment."