Auto industry seeks EV boost, tax cuts, and infrastructure push in budget 2025

Ahead of the Union Budget 2025 scheduled to be announced by Finance Minister Nirmala Sitharaman on Feb 11, 2025, the automotive sector expects policy measures that will accelerate sustainable mobility, strengthen domestic manufacturing, and enhance India's global competitiveness. Industry leaders across the board are emphasizing the need for continued support in electric vehicle (EV) adoption, tax reforms, infrastructure development, and research & development (R&D) investments.

Santosh Iyer, Managing Director & CEO of Mercedes-Benz India, highlighted the importance of forward-looking measures to sustain economic growth. "Continued push for BEV (Battery Electric Vehicle) adoption by pursuing the existing incentives, infrastructure development, and R&D initiatives will be crucial in accelerating India’s transition to green mobility, positioning us as a key player in the global BEV value chain," he said. Iyer also stressed the need for reducing trade barriers and simplifying regulatory frameworks to integrate India into the global supply chain.

Nagesh Basavanhalli, Vice Chairman, Greaves Cotton Limited, echoed similar sentiments, emphasizing fuel-agnostic technologies and sustainability. "Standardizing charging systems and investing in infrastructure with petroleum and energy companies are critical steps to accelerate EV adoption. Encouraging R&D investments and strengthening the domestic supply chain will reduce import dependency and foster innovation," he noted.
Tax Reforms and Incentives for EVs

Meanwhile, Venkatram Mamillapalle, Country CEO & MD of Renault India, emphasized the importance of tax reforms. "We expect simplification of taxes on new energy vehicles and measures that uplift the middle-income group, enhancing liquidity and consumer sentiment," he said, hoping for initiatives aligned with the Viksit Bharat 2047 vision.

Piyush Arora, MD & CEO of Skoda Auto Volkswagen India, pointed to the importance of road infrastructure and ease of doing business. "Facilitating the EV ecosystem with better charging infrastructure and budget allocations for road safety will aid the auto industry's growth. Budgetary measures to boost disposable income will also be necessary to sustain robust demand," he remarked.

The industry is also calling for investments in skill development. "Encouraging ER&D (Engineering Research & Development) and strengthening the talent pipeline will position India as an innovation hub," said Mamillapalle of Renault India.

Shreyas Shibulal, Founder & CEO of Numeros Motors, called for a revision in the current tax structure. "Reducing GST on manufacturing inputs and lowering the 28% tax rate on EVs will significantly reduce production costs, making EVs more affordable for consumers," he stated. He also underscored the importance of expanding charging networks to ease range anxiety.

Divya Chandra, Managing Director of Atul Greentech Pvt. Ltd., emphasized the need for increased incentives under the FAME scheme and a reduction of GST on EV components to 5%. "Accelerating the rollout of 20 lakh EV charging stations by 2030 and providing tax exemptions for EV buyers can significantly boost adoption," she suggested.

Naoya Nishimura, CEO of Musashi India & Africa Region, underscored the need to build on the momentum of the PLI scheme. "We hope to see faster development of EV charging infrastructure, support for high-range battery technology, and localization of components. These steps will strengthen India’s position as a leader in automotive innovation and manufacturing," he noted.

Ajinkya Firodia, Vice Chairman of Kinetic Engineering Ltd., emphasized the growth potential of the EV industry. "With the EV market poised to reach Rs 20 lakh crore by 2030 and create five crore jobs, performance-linked incentives for battery and auto-component manufacturing will be key to making EVs more affordable and accessible," he stated.