Union Budget 2025 | Support for green tech, EV ecosystem, consumer spending boost required, say automakers

New Delhi: Automakers want the government to provide merit-based policies to support a full range of green technologies and alternative fuels besides allocations to facilitate electric vehicle ecosystem like charging infrastructure to further accelerate sustainable mobility in the upcoming Union Budget.

With the automobile industry showing early signs of growth slowing down, they said budgetary initiatives to boost the disposable income of consumers are necessary to support robust growth.

"We request the government for appropriate merit-based policies that support and help in popularising full range of greener technologies and alternative fuels thereby helping in faster and greater adoption of multiple sustainable mobility solutions," Toyota Kirloskar Motor Country Head and Executive Vice President - Corporate Affairs and Governance - Vikram Gulati said.

Further, he said measures to encourage the scrapping of old vehicles through the budget will also boost demand for newer generation vehicles and eliminate the polluting ones.

Stating that the upcoming Union Budget presents an opportunity to address some pressing needs of the automotive sector, Skoda Auto Volkswagen India MD & CEO Piyush Arora said, "A long-term vision for favourable 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, he said, adding, "simplifying the GST structure for the different classes of vehicles and components is another ask".

Arora said, "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." Noting that there are early signs of auto industry growth slowing down, he said, "Therefore, budgetary initiatives to boost disposable income of consumers is necessary to support robust growth." Expressing similar views, Volvo Car India Managing Director, Jyoti Malhotra said, "We hope the budget will prioritise measures to boost consumer spending, accelerate EV (electric vehicle) 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, he added.

Malhotra noted that the Union Budget 2025-26 arrives at a critical juncture for the Indian economy, grappling with global uncertainties and a slowdown in consumer demand.

WTiCabs Founder and CEO Ashok Vashist said, "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." Similarly, Ultraviolette CEO and Co-Founder, Narayan Subramaniam said, "Key focus areas like expanding charging infrastructure and making PLI schemes more accessible to startups can be game-changers for the industry. These measures will not only drive adoption but also empower homegrown innovators to push the boundaries of technology and design."

Noting that the challenge of high interest rates continues to weigh on both consumers and businesses, making it harder to finance EV purchases and infrastructure development, Omega Seiki Founder and Chairman Uday Narang said, "There is a strong expectation that the government will introduce measures to ease financing conditions to foster widespread adoption across segments." Ratings agency ICRA Ltd Senior Vice President and Group Head, Corporate Ratings, Shamsher Dewan said following two strong years of growth, FY25 has been a period of consolidation for the domestic automotive industry with demand sentiments for most of the segments remaining steady and the pace of electrification continuing to rise.

"ICRA expects the Union Budget 2025-26 to focus on measures fostering growth, innovation and sustainability. Thrust on infrastructure spending, rural output and job creation shall continue to be key focus areas," he said.

Union Budget 2025 | Nirmala Sitharaman, who continues to be Finance Minister, will present her record 8th Union Budget this time. While inflation has burnt a hole in the pockets of 'aam janata', reports suggest there might be a tax relief for those making up to Rs 15 lakh per year. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.