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Budget 2025: Auto Industry Reacts To FM Nirmala Sitharaman's Forward-Looking Budget
The Indian Government today, with the Union Budget 2025, outlined a host of exemptions for the Indian automotive sector for EV battery manufacturing. Finance Minister Nirmala Sitharaman's eighth budget not only gave the Indian public more spending power but also paved the way for reduced prices for EVs shortly.
The Finance Minister fully exempted from customs duties on cobalt powder and waste, the scrap of lithium-ion batteries, Lead, Zinc and 12 more critical minerals while also adding 35 capital goods/machinery for use in the manufacture of lithium-ion batteries of EVs to the exemption list. Here are a few reactions from leaders from the Indian automotive industry to the 2025/26 budget...
Girish Wagh, Executive Director, Tata Motors had this to say about Budget 2025, "The Union Budget 2025 lays out a clear roadmap for long-term transformation, driving India closer to its vision of a 'Viksit Bharat' with progressive policies and reforms that foster modernization, economic growth, and inclusive development. The continued allocation of over Rs. 11 lakh crore in capital expenditure, alongside targeted initiatives to boost consumption, support 'Make in India', and promote agricultural growth, is set to create a more dynamic economic environment.
The removal of basic customs duties on key materials for battery manufacturing is a strategic move to boost domestic EV production, foster a sustainable ecosystem, and drive India's transition to a greener economy. As infrastructure projects gain momentum and consumption picks up, improved roads, connectivity, and logistics will undoubtedly drive increased demand for freight and commercial transport solutions driven by both domestic demand and broader economic recovery."
Pawan Munjal, Executive Chairman, Hero MotoCorp shared the following statement, "The Union Budget 2025 fuels India's growth engines with a bold push for manufacturing, green mobility, and rural empowerment-driving innovation, job creation, and global leadership. A bold push towards manufacturing excellence, supported by strategic investments in infrastructure, EV technology, and MSME growth, strengthens India's industrial backbone.
The elimination of income tax for individuals earning up to ₹12 lakh will spur economic activity and unlock consumer potential, while simplified tax regulations foster ease of doing business. Meanwhile, green energy investments and EV policy support accelerate India's shift to a clean, sustainable economy, positioning it as a leader in innovative mobility.
The automobile sector stands poised for a significant leap forward, with substantial investments in green energy and a clear policy framework to support energy storage solutions. These measures will accelerate India's transition to a clean mobility future, reinforcing its commitment to sustainability and technological innovation."
Anish Shah, Group CEO & MD, Mahindra Group had this to say about the Union Budget 2025, "We commend the 2025 Union Budget for its continued support of robust consumption growth through changes in the tax structure, effectively placing more disposable income in the hands of the Indian consumer. This will encourage private sector capex to move in a positive direction.
The theme of "Make in India for the world" remains a key focus in this budget, with efforts to reduce India's manufacturing costs poised to significantly enhance the country's global competitiveness. In addition to providing an immediate stimulus for demand and growth, the budget emphasizes long-term growth through substantial infrastructure investments and a strong focus on innovation."
Jyoti Malhotra, Managing Director, Volvo Car India stated, "The Union Budget 2025-26 appears to be focused on stimulating consumer spending and fostering economic growth. Measures such as tax rationalization aim to increase disposable income and boost consumption. The government's commitment to maintaining capital expenditure, without raising taxes, is a positive step.
The emphasis on domestic value addition for EV batteries and the development of a comprehensive EV ecosystem, including battery recycling, customs duty exemption on 35 capital goods for EV battery manufacturing and charging infrastructure, are encouraging initiatives that should drive EV adoption across various segments. By focusing on demand-side incentives, without placing an undue burden on taxpayers, the budget seeks to create a favorable environment for EV growth. Overall, the budget seems to be forward-looking and focused on sustainable economic development."
Mahesh Babu, CEO of SWITCH Mobility, a wholly owned EV subsidiary of Ashok Leyland stated, "India's FY25-26 budget targets economic growth with a 4.4% fiscal deficit and income tax cuts, including exemptions for individuals earning up to Rs 12 lakh boost disposable income, consumer spending benefiting sectors like commercial vehicles with higher logistics demands. The budget also simplifies duties and taxes to support MSMEs, startups, and entrepreneurship."
The exemption of customs duties on lithium-ion batteries and critical minerals such as cobalt, zinc, and lead represents a crucial step in reinforcing India's electric vehicle (EV) ecosystem. This move will enhance the competitiveness of the EV industry, helping it to grow more rapidly and become a key player in the global market. It accelerates India's progress toward Aatmanirbharta in clean energy and sustainable mobility solutions. These measures are expected to reduce the overall cost of EVs, making them more affordable for consumers, which directly supports the government's ambitious target of achieving 30% EV adoption by 2030."
Raghupati Singhania, Chairman & MD, JK Tyre & Industries also gave his thoughts about Budget 2025, stating, "The Union Budget 2025-26 lays a strong foundation for India's continued economic resilience and manufacturing excellence. Thrust on green energy transition, manufacturing and ease of doing business will propel the automotive and tyre industries forward. Emphasis on clean tech manufacturing, with incentives for EV components and advanced mobility solutions, aligns well with automotive sector's vision for sustainability. Additionally, the measures to strengthen global supply chain integration and streamline trade regulations will bolster India's global manufacturing competitiveness. We look forward to leveraging these opportunities to drive innovation and sustainable growth."
Harinder Singh, CEO & M.D, Yokohama India stated, "The Union Budget 2025 underscores India's steadfast commitment to enhancing its manufacturing ecosystem, fostering sustainability, and driving self-reliance. The introduction of the National Manufacturing Mission and the push for clean-tech manufacturing are key enablers that will accelerate the country's transition to green mobility. By prioritizing domestic production of EV batteries and solar panels, these measures are set to positively impact a wide array of sectors, including the tyre industry, which is essential to the electric vehicle revolution.
Additionally, the tax relief for the middle class will drive higher disposable incomes, leading to greater consumption across sectors, including automobiles. As vehicle demand grows, this will have a positive ripple effect on the tyre industry, further reinforcing the sector's growth trajectory."
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