The Union Budget is India’s annual financial blueprint that steers the nation’s economic direction. For the automotive sector, particularly MSMEs (Micro, Small and Medium Enterprises), this year’s budget holds special significance as the government has made a greater provision to push for EV and battery manufacturing. The incentives come in three key areas:
- Customs duty exemption on 35 capital goods for EV battery manufacturing
- Support for domestic manufacturing of motors, controllers and other EV critical components
- Integration of EV manufacturing with Clean Tech manufacturing program
The budget continues its commitment to making India a hub for electric vehicle and battery manufacturing. A comprehensive Clean Tech manufacturing support program has been announced to improve domestic value addition in solar PV cells, EV batteries, motors and controllers. The initiative includes 35 additional capital goods for EV battery manufacturing being added to the exempted list.
The focus extends to building the entire EV ecosystem, including support for battery recycling and creating charging infrastructure. Special emphasis is being placed on developing high-capacity batteries and promoting research in battery technology.
For automotive MSMEs, which form the backbone of the component manufacturing ecosystem, budget provisions for working capital support, technology upgradation funds, and easier credit access are crucial for their survival and growth.
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