On Saturday, February 1, 2025, Union Finance Minister Nirmala Sitharaman presented her record 8th consecutive Union Budget for the fiscal year 2025-26, outlining the government’s financial roadmap for the year ahead. As one of the most significant economic events of the year, the budget has far-reaching implications for multiple sectors, with the Indian automobile industry closely watching for key announcements that could impact its future. With the sector undergoing rapid transformation—driven by sustainability goals, the rise of electric vehicles (EVs), and increasing digitalization—industry leaders, manufacturers, and stakeholders are eager to understand how the proposed measures will address the challenges and opportunities they face. In this context, the Indian automobile industry’s reactions to the Union Budget will offer valuable insights into how the government’s plans align with the sector’s growth ambitions, innovation pathways, and transition toward a greener, more tech-driven future.
Mr. Girish Wagh, Executive Director, Tata Motors
“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 modernization, economic growth, and inclusive development. The continued allocation of over Rs. 11 lakh crore 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.”
Rajeev Chaba, CEO Emeritus, JSW MG Motor India
“The Union Budget’s new tax regime introduces substantial relief for young earning professionals and this is a positive sign for all consumer-facing industries. On the automotive front, the Government’s focus on enhancing domestic manufacturing capabilities and battery production will help India’s emerging EV market and boost local manufacturing.”
Mr. Akash Passey, President, ZF Group in India
The 2025-26 Union Budget, presented today, lays the foundation for inclusive growth, steering India towards becoming a rapidly developing and resilient economy. It effectively balances boosting consumption with enhancing competitiveness.
What stands out for me is the focus on improving the ‘Ease of Doing Business’ through regulatory reforms, better governance, and investment incentives. By prioritizing business facilitation, technology access, and MSME growth, this initiative is set to enhance industrial competitiveness across various sectors, including the auto components industry.
The National Manufacturing Mission is key to advancing the ‘Make in India’ vision, focusing on strengthening domestic manufacturing and building a future-ready, skilled workforce. ZF Group in India aligns with this mission by contributing advanced safety, electrification, and efficiency solutions for vehicles. The government’s emphasis on Clean Tech manufacturing supports India’s transition to sustainable mobility by boosting local capabilities in EV components and clean energy technologies. ZF Group remains committed to innovation, localization, and partnering with stakeholders to support India’s sustainable mobility goals.
Mr Naveeth Menon, VP – Sales & Marketing Operations, BAXY Mobility
“The recent budget announcements have marked a significant step forward in India’s journey towards a cleaner and greener future. By eliminating the basic customs duty on critical materials required for electric vehicle manufacturing, the government has reinforced its commitment to faster EV adoption across the country.
The budget also introduced groundbreaking initiatives to accelerate the shift toward lithium-ion batteries in the EV sector. Tax exemptions for lithium-ion battery manufacturing are set to enhance local production capabilities, positioning India as a global hub for EV manufacturing .The move aligns with India’s broader goals of reducing carbon emissions and achieving energy independence”.
Mr Shailesh Chandra, President, SIAM
“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. Furthermore, 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.”
Ms. Shradha Suri Marwah, President, ACMA
“The Union Budget 2025-26 takes a forward-looking and growth-oriented approach, reaffirming the government’s commitment to strengthening India’s manufacturing sector and advancing the shift toward cleaner mobility solutions. With a strong emphasis on MSMEs, innovation, exports, and supply chain resilience, the budget is set to drive significant growth in the auto component industry. Additionally, the proposed changes in personal income tax will enhance disposable income, boosting consumer spending and contributing to overall economic expansion.”
Mr C S Vigneshwar, President, FADA
The Union Budget 2025-26 is a well-balanced and growth-oriented budget that prioritizes middle-class spending, rural prosperity, and MSME empowerment. The increase in the income tax exemption limit to ₹12 lakh will directly boost demand for two-wheelers, passenger vehicles, and EVs, as consumers have more disposable income to upgrade their vehicles.
For the rural economy, the Dhan Dhanya Krishi Yojana, benefiting 1.7 crore farmers, along with the Kisan Credit Card loan limit expansion, will drive demand for tractors, small commercial vehicles, and two-wheelers. MSMEs, which form the backbone of the economy, are set to thrive with higher credit limits, enhanced fund-of-funds for startups, and new financing options—a move that will also encourage the expansion of auto dealerships and fleet businesses.
The National Manufacturing Mission and incentives for solar, EV batteries, and clean mobility infrastructure will accelerate the growth of the EV sector while making India a global hub for sustainable mobility. Additionally, the increase in FDI for insurance to 100% will bring more competition and innovative financing options for auto buyers, further stimulating demand.
FADA welcomes this progressive budget, which will fuel India’s auto retail sector across rural, urban, and electric vehicle segments, supporting the vision of ‘Viksit Bharat’ and sustainable mobility.
Mr. Uday Narang, Founder and Chairman, Omega Seiki Pvt. Ltd
“The Union Budget 2025-26 takes a significant step in strengthening India’s manufacturing by removing the Basic Customs Duty (BCD) on critical materials like cobalt, lithium-ion battery scrap, and lead, which are essential for lithium battery production. This move reduces production costs and accelerates the transition to affordable, sustainable technologies. It will make electric vehicles and electronics more affordable, foster domestic industry growth, and position India as a global leader in battery production and renewable energy. Omega Seiki is optimistic about the policy’s potential to drive innovation and sustainability in the sector”, according to Mr. Narang.
On Skill Development Mr. Narang said, “The announcement of three Centres of Excellence in Artificial Intelligence with a ₹500 crore allocation in the Union Budget 2025-26 is a remarkable initiative that will significantly boost India’s technological and educational landscape. This focus on AI research and its application in education will empower the next generation with cutting-edge skills, preparing them for the challenges of tomorrow’s workforce. At Omega Seiki, we strongly believe that this forward-thinking investment in skill development will drive innovation across sectors, particularly in industries like EVs, clean energy, and electronics, paving the way for a digitally proficient and globally competitive India.”
Mr. Anirudh Bhuwalka, CEO of Blue Energy Motors
“The Union Budget 2025-26 reaffirms the government’s strong commitment to sustainable transportation and the rapid advancement of electric vehicles (EVs) in India. The proposed reforms—ranging from enhanced financial support and tax incentives to substantial investments in EV infrastructure and battery manufacturing—are set to make electric mobility more accessible, affordable, and scalable. These initiatives align seamlessly with our vision at Blue Energy Motors and further reinforce our recent investment in Maharashtra to establish a cutting-edge electric truck manufacturing facility. With a robust policy push and growing domestic capabilities in battery technology, we are confident that India is on the fast track to accelerating clean-energy vehicle adoption, paving the way for a greener and more sustainable future.”
Mr. Ashok Vashist, Founder and CEO, WTiCabs
The expansion of regional connectivity under the UDAN scheme, with 120 new destinations, presents a significant opportunity for WTi Cabs/people mobility Industry to enhance its airport transfers, intercity travel, and last-mile connectivity. Simultaneously, customs duty adjustments supporting EV manufacturing—including exemptions on 35 additional capital goods—will lead to improved technology and lower vehicle acquisition costs. These initiatives will further strengthen WTi’s/ people mobility industries sustainability goals by enabling a smoother transition to electric mobility while leveraging solar-powered EV charging infrastructure, ensuring an eco-friendly and cost-effective transportation network.
Ms. Rashi Agarwal, Co-founder & Chief Business Officer, Zypp Electric
“The Union Budget 2025 reaffirms India’s commitment to fostering entrepreneurship and empowering the gig economy. The government’s decision to establish a new ‘Fund of Funds for Startups’ with an additional ₹10,000 crore infusion will provide a significant boost to innovation and job creation. This initiative, coupled with the dedicated support for 5 lakh women, SC, and ST first-time entrepreneurs, will drive inclusive growth and encourage diverse participation in the startup ecosystem.
Furthermore, introducing identity cards and healthcare coverage for gig workers under PM-Jan Aarogya Yojana is a landmark move towards recognizing and securing the livelihoods of millions in the gig economy. These measures are a game-changer at Zypp Electric, where our fleet is powered by thousands of gig workers enabling sustainable last-mile deliveries. Access to social security and financial support will empower our rider partners, enhance workforce stability, and accelerate the adoption of green mobility solutions across India. We welcome these forward-thinking initiatives, which will not only strengthen India’s entrepreneurial landscape but also ensure social security for the workforce driving the nation’s digital and mobility revolution.”
Mr. Hyder Ali Khan, CEO & Director, Godawari Electric Motors
The Union Budget’s focus on cleantech and self-reliance is a major boost for India’s EV industry, directly benefiting Godawari Electric Motors. The National Manufacturing Mission supports local EV battery and solar panel production, reducing import dependency and enhancing cost efficiency.
The establishment of five National Centres of Excellence for Skilling will strengthen the EV workforce, while the exemption of Basic Customs Duty on critical minerals like cobalt and lithium-ion batteries ensures a steady supply of key raw materials for domestic manufacturing.
Additionally, the increased tax relief of up to ₹12 lakh will enhance consumer consumption, accelerating EV adoption and reinforcing sustainable mobility adoption across segments.
Mr Yatin Gupte, Chairman & Managing Director, Wardwizard Innovations & Mobility Ltd
“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.”
Nagesh Basavanhalli, Vice Chairman, Greaves Cotton Limited
“We commend the government’s National Manufacturing Mission, which strengthens India’s position in mobility and energy. Lower import duties, expanded PLI incentives, and a dedicated EV R&D push will drive local manufacturing, cost efficiency, and innovation. Skilling initiatives and e-mobility expansion will create a future-ready workforce, reinforcing India’s path to self-reliance in multi-fuel and sustainable transportation.”
Mr. Pulkit Khurana, Co-Founder and CEO, Battery Smart
“The Union Budget 2025 brings positive momentum to the EV sector, reinforcing India’s commitment to clean mobility. The removal of basic customs duties on essential battery materials such as lithium, along with the inclusion of 35 more duty-free items for EV battery manufacturing, will lower production costs, making EVs more affordable for consumers. These measures will not only boost domestic manufacturing, reduce import dependence, but also significantly advance India’s clean energy goals.
Additionally, the introduction of a social security scheme for gig and platform workers is a vital step toward their formal recognition and financial security, contributing to a more inclusive economy. Together, these initiatives strengthen India’s position in green mobility, while fostering job creation and driving growth in emerging sustainable industries.”
Mr. Niranjan Kirloskar, MD – Fleetguard Filters Ltd
“The Union Budget presented today, demonstrates our government’s will to boost India’s manufacturing sector. Introducing a ‘National Manufacturing Mission,’ with an 89% increased allocation to ₹16,092 crore, highlights our government’s dedication to improving domestic production capabilities. Extending PLI schemes to various sectors is a good strategic move to diversify and strengthen local manufacturing. The much-needed tax reforms, like higher exemptions and simplifying tax slabs, will improve consumer sentiment and spending, invariably stimulating demand for various manufactured goods.
Additionally, the announcement to set-up a centre for AI, and readying talent for Industry 4.0 will provide a much-needed impetus to all industries enabling crucial job-creation and for us to ‘Make in India – For the World’. Lastly, a focus on infrastructure development and digitisation will create a more favourable environment for domestic manufacturing operations. I remain optimistic that these measures will enhance our nation’s global competitiveness, and contribute to overall sustainable economic growth!
Mr Maxson Lewis, Founder and CEO of Magenta Mobility
“The Union Budget 2025 marks a significant step toward strengthening India’s economy while addressing key challenges faced by SMEs and gig workers. Recognizing the vital role of MSMEs in the EV industry, the budget introduces targeted incentives, skill development programs, and infrastructure support—equipping them with the resources needed to scale and innovate.
Similarly, the expansion of the E-Shram scheme is a crucial win for gig workers, providing access to social security, fair wages, and enhanced upskilling opportunities. In an increasingly digital economy, these measures foster a more inclusive and resilient workforce.
Notably, the budget delivers a strong push for manufacturing, particularly in electronics and EV battery production, while offering fresh investment incentives for startups. With a clear focus on clean energy, self-reliance, and innovation, this budget goes beyond financial figures—it empowers businesses, workers, and entrepreneurs to drive a more sustainable and globally competitive India.”
Mr. Hiren Pravin Shah Founder, MD & CEO – Replus Engitech (A Subsidiary of Bhilwara Energy Limited)
Owing to the Union Budget announcement, these are exciting times for the Green Revolution. The import duty cuts on EV batteries and the government’s push for technology driven local manufacturing of grid scale batteries are welcome moves for Replus. This initiative aligns perfectly with our vision for an Atmanirbhar Bharat, strengthening our commitment to developing world-class energy storage solutions in India for the global market.”
Mr. Govind Sankaranarayanan, Co-founder & COO of Ecofy
“The announcement of the National Manufacturing Mission to support clean tech manufacturing is a significant step toward accelerating India’s green transition. By boosting domestic production of EV batteries and solar panels, this initiative will reduce reliance on imports, while also driving innovation and create sustainable jobs. At Ecofy, we are committed to enabling a greener future, and this move aligns perfectly with our mission to support clean energy solutions that empower businesses and individuals. We applaud the government’s vision for fostering a self-reliant and sustainable clean tech ecosystem in India.”
Mr. Sharad Malhotra, President, Automotive Refinishes & Wood Coatings, Nippon Paint India
“The Union Budget 2025-26 has introduced several initiatives for strengthening India’s manufacturing sector and clean mobility. The ‘Make in India’ focus of the National Manufacturing Mission will boost local production, reduce import dependence, and strengthen supply chains, creating a more self-reliant economy. This initiative also emphasizes the importance of R&D to drive innovation and enhance manufacturing capabilities within India. At Nippon Paint India, we see this as a great opportunity to contribute to clean energy innovation and sustainable manufacturing. We’re committed to expanding local production, investing in advanced facilities, driving R&D efforts for next-generation products, and partnering with industry leaders to build a robust ecosystem for growth.”