Extension of flagship initiatives, policy continuity, dedicated PLI framework for start ups and mid-scale entrepreneurs among key expectations from the government
The past year has tested India’s electric mobility industry in many ways, shaped by global supply shocks, tariff wars and geopolitical volatility affecting demand in key segments. Yet beneath the surface volatility, the sector did not stall. Manufacturers refined strategies, fleet operators reassessed total cost equations, and policymakers focussed on pushing India’s EV transition into a project of national consequence.
The government spent much of the last year steadying the ecosystem. Support came not through grand new announcements, but through targeted interventions designed to handhold an industry moving from early adoption to scale. The measures helped the industry absorb the global shocks and turbulence while keeping domestic momentum intact.
As the Union Budget approaches, expectations within the electric mobility industry are therefore more calibrated. This time the ask is for sharper instruments, extension of flagship initiatives, policy continuity, dedicated Production Linked Incentive (PLI) framework for start ups and mid scale entrepreneurs, among others.
Heavy vehicles, freight corridors, and charging infrastructure for commercial use are increasingly seen as the next frontier. Industry voices also believe that the upcoming Union Budget should look at rationalisation of duties on EVs, provide greater support for localising EV technology and multiple green pathways in the automotive segment.
Given the geopolitical turmoil and the usage of critical minerals and rare earths, essential components for these sustainable transitions, by countries as leverage, the industry is also looking at the government to reconceptualise and re-define its critical mineral security as a long-term institution-building framework.
Experts point out that this would mean moving beyond extractive, transactional models towards development-oriented partnerships particularly with mineral resource-rich countries in Africa, Southeast Asia, Central Asia, and the Indo-Pacific. They believe that diversification is key to bolster India’s supply chain resilience and if done right, it can help shape a more multipolar, equitable critical minerals economy, where resource-rich countries are partners rather than peripherals.
Fig 1: An electric vehicle charging station. Picture: Frederic J. Brown/Getty Images
Electric Vehicle Industry Expectations from the Upcoming Budget
Many in the industry believe that through timely and forward-looking government initiatives, India is emerging as a shining example of accelerated EV adoption which is an imperative transition given the country’s environmental challenges and urban pollution levels. Experts believe that India’s EV adoption has been fundamentally driven by value creation: lower operating costs through fuel savings, reduced maintenance, and the integration of smart, connected technologies.
“As we look ahead to the upcoming Union Budget, there is strong hope that the Government of India will continue to reward EV consumers by extending flagship initiatives such as the PM E-Drive policy, while further enhancing incentives for citizens who are embracing cleaner and future-ready technologies, ” said Ajinkya Firodia, Vice Chairman and Managing Director, Kinetic Watts and Volts Ltd.
Firodia maintains that to offset fiscal impact, the government could consider a calibrated pollution-linked tax on high-emission vehicles. “Additionally, higher incentives for consumers willing to scrap older ICE vehicles and transition to EVs would significantly accelerate fleet renewal and contribute meaningfully to pollution reduction – an urgent national priority,” Firodia pointed out.
At the same time, the EV ecosystem must recognise and support manufacturers who have the courage to invest early, he said, adding that a dedicated PLI framework for startups and mid-scale entrepreneurs is essential – one that empowers Indian companies to innovate and compete in an industry dominated by global giants, while strengthening domestic manufacturing capacity.
“The recently announced ₹1 lakh crore RDI fund stands out as an exemplary step in encouraging deep-tech research and innovation. It deserves special appreciation as part of the Hon’ble Prime Minister’s vision for building a truly Atmanirbhar Bharat. This initiative has the potential to catalyse breakthrough technologies – reducing dependence on rare earths and imported lithium cells, while fostering sustainable, next-generation solutions,” Firodia said.
Targeted support for export-oriented manufacturers is critical to counter competitiveness pressures arising from global geopolitical uncertainties and tariff wars. Incentivising exports will help Indian companies remain resilient and globally relevant, he added.
Others believe that after the successful implementation of GST 2.0, the industry is looking forward to policy continuity and long-term clarity. Piyush Arora, MD and CEO of Skoda Auto Volkswagen India, said sustained support for domestic manufacturing and increased allocation for road and transport infrastructure will be key priorities.
“Rationalising the inverted duty structure for EVs will strengthen domestic manufacturing and competitiveness, and will further accelerate India’s transition to sustainable mobility. Continued focus on building the EV ecosystem, alongside measures that support household disposable incomes, will be essential to sustain demand momentum and reinforce the sector’s role in India’s broader economic growth,” Arora said.
Speaking from the perspective of the tyre industry, Harinder Singh, Managing Director and CEO, Yokohama India Pvt. Ltd said the industry requires policy continuity that reinforces manufacturing competitiveness and enables scale. While sustained infrastructure investment and the structural shift toward SUVs and premium vehicles have improved demand visibility, input cost stability remains the sector's most pressing challenge.
“Natural rubber volatility continues to impact margins significantly. With India importing a substantial portion of its natural rubber requirements due to limited domestic availability, duty rationalization on critical raw materials would meaningfully improve cost efficiency and strengthen the global competitiveness of Indian tyre manufacturers,” Singh said.
“For India to emerge as a global manufacturing hub for premium tyres, the Budget must deliver on three critical fronts: continued infrastructure capital expenditure to sustain automotive demand, enhanced export facilitation measures including duty drawbacks and logistics support, and stable trade policies on raw materials that provide cost predictability. These interventions would directly advance the Atmanirbhar Bharat vision while strengthening India's position in global automotive supply chains," he added.
What Had the Government Announced in Last Year’s Budget
Last year during the budget, the government had announced an ambitious framework that aimed to bolster India's manufacturing sector while contributing to a greener, more sustainable future. The government had announced the “National Manufacturing Mission” to cover small, medium and large industries for furthering the “Make in India” initiative.
The mission envisaged supporting Clean Tech manufacturing and improving domestic value addition and building the ecosystem for solar PV cells, EV batteries, motors and controllers, electrolyzers, wind turbines, very high voltage transmission equipment and grid scale batteries.
To support domestic manufacturing and value addition, the government had also announced full exemption of Basic Custom Duty (BCD) on cobalt powder and waste, scrap of lithium-ion battery, Lead, Zinc and 12 more critical minerals. This had come on the back of the government's announcement of exempting BCD on 25 critical minerals, that were not domestically available, in July 2024.
The government had also proposed the addition of 35 additional capital goods for EV battery manufacturing, and 28 additional capital goods for mobile phone battery manufacturing to the list of exempted capital goods, with an aim to boost domestic manufacture of lithium-ion batteries, both for mobile phones and electric vehicles. The government had also announced a Deep Tech Fund of Funds will be explored to catalyze the next generation startups.
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