Union Budget 2025-26: A Boost for India’s Automotive Sector

TheBudget 2025-26, presented by Finance Minister Nirmala Sitharaman, has laid out a transformative roadmap to strengthen India's manufacturing sector and its journey toward becoming a global manufacturing hub, with a particular focus on the automotive and electric vehicle (EV) industries. As the country continues its push towards sustainability and self-reliance, this budget introduces several measures that will significantly impact the sector’s growth trajectory. Strengthening Domestic Manufacturing and Critical Minerals Supply Recognizing the importance of securing raw materials for India's industrial and clean energy ambitions, the government has expanded exemptions on Basic Customs Duty (BCD) for critical minerals. Following the July 2024 Budget’s exemption for 25 minerals, the new proposal extends full BCD exemptions to cobalt powder, lithium-ion battery waste and scrap, lead, zinc, and 12 additional minerals. These measures will not only ensure a stable supply chain for domestic industries but also create employment opportunities in mining and processing sectors. Additionally, the reduction of customs duties on lithium-ion cells and the proposed incentives for domestic battery manufacturing will help lower EV production costs. The focus on expanding charging infrastructure, with enhanced support for public-private partnerships, is another positive development that will address range anxiety and improve EV adoption rates. Accelerating EV and Clean Tech Manufacturing