February 3, 2025 The Union Budget 2025, presented by Hon’ble Finance Minister Nirmala Sitharaman, has introduced a slew of measures that are expected to drive significant growth in India’s automotive sector. With a strong focus on sustainability, clean tech, and electric vehicles (EVs), the government has laid the groundwork for the future of green mobility and self-reliance in manufacturing. Here’s how the automotive industry is reacting to these game-changing initiatives.
Key Announcements:
1. Customs Duty Exemption on EV Battery Production:
The Budget 2025 has waived customs duties on 35 critical goods necessary for the manufacturing of EV batteries, including key materials like lithium, cobalt, and nickel. This will significantly reduce production costs, making EVs more affordable and accelerating adoption.
2. Incentives for Domestic Manufacturing:
The government has set up a Clean Tech support program, which includes exemptions for crucial EV components like motors, controllers, and batteries. This will further boost India’s position as a manufacturing hub for EVs and clean-tech solutions.
3. PLI Scheme Allocation:
A significant allocation of ₹2,819 crores for the Production Linked Incentive (PLI) scheme has been made for the automotive sector. While this is slightly lower than last year’s ₹3,500 crore, it will continue to drive innovation and local manufacturing, particularly in the EV space.
4. Boost to Rural Demand:
With the launch of the Dhan-Dhaanya Krishi Yojana, the government is focusing on rural prosperity, which is expected to create demand for vehicles, particularly in underserved areas.
5. Tax Relief for Middle Class:
The Budget has increased the income tax exemption limit to ₹12 lakhs, which means more disposable income for consumers. This could lead to an uptick in vehicle purchases across segments, particularly for two-wheelers, passenger cars, and other mobility solutions.
The 2025 Budget presents transformative measures that will drive India’s automotive industry towards a greener and more sustainable future. With key policies like the removal of customs duties on EV battery components and support for domestic production, electric vehicles are set to become more affordable and accessible. The government’s focus on clean tech, battery recycling, and charging infrastructure development lays a strong foundation for growth, accelerating the country’s transition to a greener economy while boosting local manufacturing capabilities.
Jubilant MotorWorks CEO, Amit Jain shared, “The 2025 Budget marks a pivotal moment in India’s transition to electric vehicles, with strong support for infrastructure, battery production, and cost reduction. At Jubilant MotorWorks, we’re excited about the opportunities this brings for both consumers and manufacturers. With these policies in place, we’re ready to meet the growing demand for green mobility solutions through our portfolio of leading auto brands and continue offering the best in sustainable automotive choices.”
As India moves toward a greener future, the promotion of EV adoption and domestic manufacturing will play crucial roles in shaping the automotive sector’s long-term growth, making the 2025 Budget a key catalyst in India’s journey toward becoming a global leader in clean-tech manufacturing.
