The Union Budget 2025-26 comes at a crucial time for India, as the economy navigates global uncertainties and strives to accelerate growth across key sectors. From the automotive industry’s aspirations for policy stability and incentives for electric vehicle (EV) adoption to the manufacturing sector’s call for global competitiveness and innovation, stakeholders across industries are pinning high hopes on this year’s budget.
Mr. Jyoti Malhotra, Managing Director of Volvo Car India
“The Union Budget 2025-26 arrives at a critical juncture for the Indian economy, grappling with global uncertainties and a slowdown in consumer demand. While the automobile sector witnessed a moderate 5% growth last year, building upon a strong base, the industry anticipates further growth momentum. Looking ahead, we hope the Budget will prioritize measures to boost consumer spending, accelerate EV adoption through incentives and infrastructure development, and invest in skill development programs to address the evolving needs of the sector. Furthermore, continued policy stability and a focus on sustainable growth will be crucial for the Indian automobile sector to navigate the current economic landscape and contribute significantly to the nation’s economic progress.”
Mr Piyush Arora, MD & CEO of Skoda Auto Volkswagen India
“The upcoming Union Budget presents an opportunity to address some pressing needs of the automotive sector. A long-term vision for favorable tax structure catering to different automotive technologies would certainly benefit the industry. The product development cycles are quite lengthy and require substantial investment which needs to be considered. Simplifying the GST structure for the different classes of vehicles & components is another ask.
The Government‘s PLI scheme facilitates in boosting investments in domestic manufacturing. Budget allocation on facilitating the EV ecosystem like charging infrastructure will give further lift to sustainable mobility. Allocating a budget for better and safe road infrastructure will facilitate the growth of the auto industry.
There are early signs of auto industry growth slowing down. Therefore, budgetary initiatives to boost disposable income of consumers is necessary to support robust growth. I am optimistic that this Budget will introduce practical and forward-looking measures to strengthen the automotive sector and support its role in India’s economic growth and environmental ambitions.”
Mr. Uday Narang, Founder and Chairman, Omega Seiki Private Limited
“As the 2025 Union Budget approaches, the electric vehicle (EV) industry is eagerly awaiting announcements that could significantly shape its growth trajectory. Industry experts are hoping for increased incentives and subsidies, especially for the E-truck segment, which is poised to revolutionize logistics and transportation. With growing demand for electric three-wheelers, which provide an affordable and eco-friendly transportation alternative, the industry anticipates the government will focus on expanding incentives for both manufacturers and consumers. However, the challenge of high interest rates continues to weigh on both consumers and businesses, making it harder to finance EV purchases and infrastructure development. There is a strong expectation that the government will introduce measures to ease financing conditions to foster widespread adoption across segments.
In addition to financial relief, the EV industry is pushing for enhanced support for charging infrastructure, particularly in rural and remote areas. Expanding EV charging networks is vital to ensure the success of electric vehicles in India, but significant investments are needed. To achieve this, stakeholders hope to see the introduction of tax breaks, public-private partnerships, and streamlined regulations for infrastructure development. With growing concerns around climate change and air pollution, the EV sector looks forward to a budget that not only addresses the current challenges but also accelerates India’s transition to a sustainable and future-ready mobility ecosystem.”
Mr. Anirudh Bhuwalka, CEO, Blue Energy Motors
“As we stand at the cusp of a transformative era in commercial transportation, the upcoming Union Budget presents a pivotal opportunity to accelerate India’s transition toward sustainable mobility. Speaking at the Bharat Mobility Summit, Prime Minister Narendra Modi highlighted the importance of green mobility as a cornerstone of India’s sustainable development journey. LNG, with its ability to drastically reduce carbon emissions, is not merely a fuel alternative but a key enabler of a cleaner, greener logistics ecosystem. Together with advancements in EV technology, LNG and EVs represent the future of commercial trucking—a future that harmonizes environmental stewardship with operational efficiency.
To realize this vision, the government must prioritize investments in LNG refuelling infrastructure, EV charging networks, and fiscal incentives to drive adoption. These steps will position India as a global leader in sustainable logistics, align with net-zero goals, and strengthen the competitiveness of India’s supply chain on the world stage.”
Mr. Sunil Kalra, Partner- Governance, Risk, Compliance and Forensic Investigation Services, Forvis Mazars in India
“The Union Budget 2025 holds immense significance for India’s manufacturing sector as the country strives to achieve its $2 trillion export target by 2030. To enhance global competitiveness, we expect measures such as tariff rationalization, duty exemptions, and expanded remission schemes to lower production costs and boost exports. Simplifying compliance procedures is also crucial to streamline operations and attract greater foreign investments. Targeted incentives for high-value manufacturing sectors like electronics and precision machinery, alongside support for labour-intensive industries such as textiles, footwear, and food processing, can drive rural development and create widespread employment. Additionally, fostering innovation by adopting Industry 4.0 technologies such as AI, digital twins, and 3D printing will position India as a hub for advanced manufacturing. We hope the budget introduces a visionary roadmap that propels the sector toward sustainability, agility, and leadership in global supply chains, fuelling inclusive economic growth”
Mr. Ashok Vashist, Founder and CEO, WTiCabs:
EV industry: “As the transportation industry continues its transition towards sustainable and eco-friendly solutions, there is growing optimism about the upcoming budget’s potential to further support the adoption of electric vehicles (EVs). A strong push for incentives to make EVs more accessible, not only for individual consumers but also for businesses committed to reducing emissions and offering cleaner transport options, will be vital. Investment in EV infrastructure, such as charging stations, and incentives for fleet electrification are crucial to ensuring services like ours can lead the way in providing sustainable mobility solutions.
With the right support, the budget can catalyze a transformative shift towards green transport, create new job opportunities, and position India as a leader in the global EV revolution. This pivotal moment presents an opportunity to amplify the growth of the EV sector, enabling companies like ours to expand operations, improve infrastructure, and deliver on the promise of a greener tomorrow.”
Mobility industry: “There are multiple tax regimes for the car rental business, namely 5%, 12%, 18%, and 28% + cess for leasing. GST, being a destination-based taxation system, does not allow clients/end consumers to avail of Input Tax Credit (ITC) for such taxes. Moreover, this type of taxation makes car rentals more expensive for app-based aggregators, and leasing becomes costlier than bank funding due to GST being charged even on interest. This creates widespread confusion and results in a complicated taxation system, leading to complex accounting issues and increased litigation.
As an industry, we should urge the government to introduce a unified tax regime of 5% without ITC across all car rental and leasing products. Additionally, implementing a unified one-time or monthly state entry tax for all commercial vehicles would resolve many challenges while promoting road transportation. This simplification would significantly boost the self-drive car rental business as well.
In the past couple of years, we have witnessed fantastic road infrastructure development, which has greatly boosted tourism and intercity road travel. However, similar development efforts should be initiated within cities to enhance urban connectivity. Furthermore, increased allocation for infrastructure development, including the accelerated rollout of 5G networks, would enhance connectivity and drive digital transformation across industries.”
Mr. Maxson Lewis, Founder and CEO of Magenta Mobility
“The Union Budget 2025 is a pivotal moment for the EV logistics sector, which plays a crucial role in India’s transition to sustainable transportation. Targeted incentives for commercial fleet electrification, reduced financing costs for EV logistics operators, and a more structured GST framework for EV components can significantly accelerate adoption.
Additionally, policy support for localised battery recycling and supply chain development will strengthen India’s self-reliance in the EV ecosystem. With the right measures, the Budget can drive large-scale EV adoption in logistics, making clean mobility more accessible, efficient, and economically viable.”
Mr. Pulkit Khurana, Co-Founder, Battery Smart
“In 2024 EV sales in India crossed 14.08 lakh units achieving a market penetration rate of 5.59%, up from 4.44% in the previous year. As we look ahead to the upcoming budget, it’s important to address the GST disparity that’s limiting the full potential of EV adoption. Currently, EVs with lithium-ion batteries attract a GST of 5%, while standalone batteries face a much higher rate of 18%. This disparity places a significant financial burden on commercial EV drivers, particularly electric three wheelers, and gig workers, who are at the heart of India’s EV ecosystem.
We hope policymakers will take steps to align the GST on standalone batteries with that of EVs at 5%. This adjustment would not only reduce costs for commercial drivers but also make EVs more accessible and financially viable, ensuring the benefits of clean mobility reach the grassroots and drive widespread adoption.”
Mr. Avinash Sharma, Co-Founder and CEO, of ElectricPe
“EV sales in India crossed 1.9 million units in 2024, reflecting a substantial 27% year-on-year growth. Progressive policies and increasing consumer confidence in electric mobility have driven this momentum. As we look ahead, ensuring continued growth and accessibility will require a focus on aligning key elements within the ecosystem.
One important consideration is the variation in GST rates across EV components. Currently, manufacturers procure electrical components at 12% and 18% GST and mechanical parts at 28%, while the final vehicle is taxed at 5% to encourage adoption. A more consistent GST structure across components could help streamline operations, improve working capital efficiency, and accelerate the expansion of EV infrastructure, ultimately supporting India’s long-term vision for clean mobility.”
Mr. Narain Karthikeyan, Founder, DriveX:
“With the Union Budget on the horizon, we look forward to forward-thinking policies that promote affordability, business-friendly environment, and sustainable mobility. To begin with, we’re seeing rural demand pick up for auto, while urban demand is slowing. A friendlier tax regime to boost disposable income in urban areas would be a good start. To make affordable mobility a reality for middle- and lower-income groups, targeted initiatives like interest subsidies on refurbished vehicle loans, and lowering GST on refurbished vehicles would be highly beneficial while reinforcing the circular economy.
Additionally, easing compliance norms and offering financial support for automotive and tech startups will encourage innovation and growth.Creating favourable policies like PLI schemes for businesses operating in unorganised sectors is one direction. Providing incentives for startups expanding into Tier 2 and Tier 3 cities, along with subsidies for rural mobility solutions, can also drive economic inclusivity.
Furthermore, fostering job creation through skill development programs for refurbishment professionals and recognizing gig workers’ contributions will uplift the workforce. A budget that prioritizes green technology, digital advancements, and pro-business reforms will not only boost India’s automotive sector but also make mobility more inclusive and sustainable for all”.
Mr. Navkaran Singh, CoFounder and MD, EnerG Lubricants
The Union Budget 2025-26 introduces several measures expected to impact the automobile and lubricants industries positively.
Automobile Industry: The government has allocated ₹6,421.33 crore for the automobile sector, with a significant boost to the Production Linked Incentive (PLI) scheme for automobiles and components, which now receives ₹3,500 crore for FY25, up from ₹604 crore in FY24. These initiatives aim to strengthen manufacturing capabilities and support the sector’s overall development. Additionally, ₹2.66 lakh crore for rural development and ₹1.52 lakh crore for agriculture and allied sectors are expected to spur demand for entry-level vehicles, two-wheelers, and small commercial vehicles, particularly in rural markets.
Lubricants Industry: Though the budget does not directly address the lubricants industry, it may benefit indirectly from increased infrastructure investments, boosting demand for industrial lubricants in construction and heavy machinery. The growth in the automobile sector is likely to create opportunities for conventional lubricants used in vehicles. Furthermore, initiatives to support Micro, Small, and Medium Enterprises (MSMEs) could enhance prospects for lubricant manufacturers and distributors operating within this sector.
In summary, the 2025-26 budget provides a promising outlook for the automobile sector, emphasizing growth in manufacturing and rural demand. The lubricants industry is set to gain from broader economic development and industrial activities.