New Delhi: The red bahikhata in Finance Minister Nirmala Sitharaman’s hands, to be presented on February 1, 2025, holds the hope of bringing new opportunities to the country with digitalisation, localisation and other advancements.
The auto industry has pinned its hopes on this budget to transform the Indian auto sector with sustainability. This transformation requires uniformity in taxes for electric vehicles (EVs), upskilling of human resources, a strengthened local supply chain, and much more.
Keeping Pace with the World
To become a competitive player in the global auto industry, India needs an upskilled workforce to meet growing demands. Nagesh Basavanhalli, Vice Chairman of Greaves Cotton Limited, stated, “We believe that a strong emphasis on fuel-agnostic technologies, sustainability, and skill development will be essential for India’s journey toward a resilient and inclusive future.”
The growing demand for localized products and the rapid shift to electrification require more than just skill development. “Proposals around skill development, rationalisation of tax rates, and policy measures promoting the ecosystem of alternative fuels, vehicle scrappage, and parts localisation will support the broader automotive sector,” stated Shamsher Dewan, Senior Vice President and Group Head, Corporate Ratings, ICRA Limited.
The Urgent Need for Localisation
To support the “Atmanirbhar Bharat” (self-reliant India) agenda, a strategic funding approach and continuous government support are essential. This will not only foster self-reliance but also curb high production costs, making products more affordable while integrating advanced technologies into the automotive market.
Samir Gupta, Head of Central Region – BA Tires APAC and Managing Director of Continental Tires India, stated, “The industry is also seeking rationalized GST rates on essential tire manufacturing components, which would reduce production costs. Continued support under the Production-Linked Incentive (PLI) scheme is vital for strengthening the ‘Make in India’ initiative, boosting domestic production, and encouraging innovation.”
To meet the growing demand in the automotive sector, the country depends heavily on robust financing solutions. Neeraj Dhawan, Managing Director of Tata Motors Finance, stated, “The NBFC auto finance industry anticipates key policy interventions that can facilitate easier fundraising and enhance liquidity access. Earmarking strategic funds to further stimulate sectors like green mobility will be crucial to unlocking the full growth potential in the auto segment. While increasing upfront vehicle costs remain a significant barrier, NBFCs are uniquely positioned to support vehicle ownership across segments and drive EV adoption at scale in India.”
This can be achieved through collaboration between the government and the private sector. It will also boost employment opportunities, logistics, and more. “It can bridge the infrastructure gap, particularly in urban centers where space is constrained. Budgetary support for battery-swapping facilities could spur innovation, create jobs, and empower fleet operators, logistics, and last-mile delivery services to transition to clean energy,” said Vikas Aggarwal, Founder & MD of Ipower Batteries Pvt Ltd.
Transformative reforms and policies will pave the way for a sustainable future in auto industry. “We strongly urge the government to provide robust financial support through subsidies, tax rebates, and substantial investments in public charging infrastructure. Facilitating the private sector’s involvement in developing a comprehensive EV ecosystem will be crucial, especially in empowering tier 2 and tier 3 cities to embrace this green transition,” said Anshul Gupta, MD, OPG Mobility.
To bolster the manufacturing ecosystem for EV components, the government has to simplify the GST structure and addressing the inverted duty on raw materials. These are some crucial steps to alleviate working capital challenges and enable sustainable manufacturing practices, said Rajnikant Behera ,Executive Director, RSB Group. “The extension of the PLI scheme for indigenous EV component manufacturing will reduce dependency on imports and position India as a global leader in the EV supply chain,” he added.
Technological Advancements
The government should actively foster the adoption of new fuel technologies such as EVs, LNG, hydrogen, and more. Pratik Kamdar, CEO and Co-founder of Neuron Energy, discussed the potential of making India a major global player, stating, “Bridging the gap in local EV battery manufacturing through budget-backed initiatives and fostering international collaborations will be instrumental in establishing India as a global leader in the EV ecosystem.”
A strong emphasis on fuel-agnostic technologies is required to ensure a resilient and inclusive future, which demands robust R&D. Anirudh Bhuwalka, CEO of Blue Energy Motors, mentioned, “Together with advancements in EV technology, LNG and EVs represent the future of commercial trucking—a future that harmonizes environmental stewardship with operational efficiency.”
With the rise of digital transformations and software-defined vehicles driven by AI in India, there is a need for significant research funding. Warren Harris, CEO & MD of Tata Technologies, said, “We recommend increased allocation toward upskilling initiatives aligned with Industry 4.0, creating a future-ready workforce capable of excelling in advanced technologies like AI, IoT, and cybersecurity. We are optimistic about Union Budget 2025 and its potential to empower industries with the tools to lead the global technology landscape.”
“Encouraging investments in R&D and strengthening the domestic supply chain for EV components will play a pivotal role in reducing reliance on imports and fostering innovation,” stated Nagesh Basavanhalli, Vice Chairman of Greaves Cotton Limited.
Dr. Raghupati Singhania, Chairman & Managing Director of JK Tyre & Industries Ltd, stated, “With young India becoming highly mobile, entrepreneurial, and increasingly tech-savvy, the upcoming Union Budget is expected to address their needs by fostering supportive policies and a conducive business environment.”
This is further supported by Vaibhav Kaushik, Co-founder & CEO of Nawgati, who mentioned that prioritizing investments in technology, clean energy initiatives, and enforcement infrastructure could set India as a global example in building sustainable urban infrastructure while improving the quality of life for its citizens. Nawgati is a technology-driven startup in the energy space, working toward smarter mobility and cleaner energy solutions.
By fostering advancements in technology, reducing dependence on imports, and making green mobility more affordable, the country can position India as a global leader in the EV landscape, said Ankit Sharma, CEO & Co-Founder, Vidyuta.
