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India's Union Finance Minister Nirmala Sitharaman unveiled Budget 2025, a plan significantly bolstering the nation's commitment to electric vehicle (EV) manufacturing and clean technology. The budget's key announcements include a comprehensive Clean Tech support program, strategic customs duty exemptions on 35 capital goods crucial for battery production, and attractive incentives aimed at stimulating domestic manufacturing of EV motors, controllers, and other key components. This proactive approach has garnered widespread praise from the auto industry, with numerous executives expressing optimism about the potential for accelerated growth and a greener future for India's transportation sector.
The positive reactions from key players in the automotive industry highlight the significant impact of the budget's provisions. Girish Wagh of Tata Motors lauded the budget's long-term vision, emphasizing the strategic importance of removing basic customs duties on essential battery manufacturing materials. This move, he believes, will not only stimulate domestic EV production but also foster a sustainable ecosystem that supports India's transition towards a more environmentally conscious economy. Similarly, Jyoti Malhotra of Volvo Car India welcomed the emphasis on building a comprehensive EV ecosystem, including crucial aspects such as battery recycling and the expansion of charging infrastructure. The customs duty exemption on 35 capital goods for EV battery manufacturing, she noted, is a crucial step towards driving EV adoption across various market segments.
Several industry leaders highlighted the budget's potential to make EVs more affordable for consumers. H S Bhatia of Daewoo India pointed to the exemption of lithium batteries from Basic Customs Duty as a significant catalyst for growth in the electric vehicle sector. Yatin Gupte of Wardwizard Innovations & Mobility Ltd. directly linked the reduction in customs duty on lithium and other raw materials to lower input costs for lithium-ion battery manufacturing, ultimately making EVs more accessible to a wider range of consumers. Hyder Ali Khan of Godawari Electric Motors underscored the substantial cost savings, estimating that batteries account for roughly 40% of an EV's total cost, making any reduction in battery costs a direct benefit to consumers.
The budget's impact extends beyond cost reduction, influencing technological innovation and domestic production capabilities. Vikram Handa of Epsilon Advanced Materials hailed the removal of duties on critical minerals—including cobalt powder, lithium-ion battery scrap, lead, and zinc—as a 'game-changer.' The inclusion of 35 additional goods for EV battery manufacturing in the exempted capital goods list further strengthens domestic production capabilities and reduces reliance on imports. Deepak Pahwa of Bry-Air emphasized India's potential to emerge as a global leader in battery manufacturing, asserting that the government's decision would promote the adoption of innovative Li-ion battery manufacturing technologies and increase efficiency. Uday Narang of Omega Seiki Pvt. Ltd. echoed this sentiment, viewing the customs duty exemption as a crucial step towards accelerating the transition to more affordable and sustainable technologies.
The budget's support for micro, small, and medium enterprises (MSMEs) also garnered considerable attention. Ayush Lohia of Lohia Auto welcomed the provision of customized credit cards with a limit of Rs 5 lakh, which will provide much-needed access to capital for micro industries. The enhancement of investment and turnover limits for MSMEs was also seen as a crucial step to stimulate growth and improve operational efficiency. Yogesh Bhatia of LML praised the National Manufacturing Mission, recognizing the cost-cutting benefits of the customs duty exemptions and the expansion of the list of goods for EV and mobile battery manufacturing. These measures, he argued, will not only boost domestic production and strengthen supply chain resilience but also position India as a global leader in clean-tech innovation. While Vaibhav Kaushik of Nawgati acknowledged the government's clean energy push, he also emphasized the importance of a balanced approach, advocating for a diverse energy mix that caters to different consumer needs and ensures a smooth and inclusive energy transition.
In conclusion, Budget 2025's focus on electric vehicles, clean technology, and supportive measures for domestic manufacturing has been met with considerable enthusiasm by the Indian auto industry. The widespread positive response indicates a significant potential for growth in the EV sector, increased affordability for consumers, and the strengthening of India's position as a global leader in clean energy technologies. The removal of customs duties on key components, incentives for domestic manufacturing, and support for MSMEs all contribute to a comprehensive strategy aimed at accelerating the transition to a greener and more sustainable future for India's transportation sector. The long-term implications of these policies are far-reaching, promising not only economic benefits but also a significant contribution towards environmental sustainability.
Source: Budget 2025: Auto Industry applauds clean tech, battery manufacturing and EV initiatives