(MENAFN- KNN India)
New Delhi, Feb 3 (KNN) The Indian automotive industry has largely welcomed the Union Budget 2024, particularly the customs duty exemption on capital goods used in lithium-ion battery manufacturing.
Industry leaders believe this move will enhance local production, strengthen supply chains, and accelerate India's transition to clean mobility.
“The industry appreciates the rationalisation of customs duties on key raw materials and the reduction of inverted duty structures, which will make domestic manufacturing more cost-effective. The duty exemption on capital goods for EV battery manufacturing is a strong step toward enabling India's transition to electric mobility,” said the Automotive Component Manufacturers Association (ACMA) in a press statement.
Another key announcement was the elimination of customs duty on scraps of 12 critical minerals, including copper, cobalt powder, and lithium-ion battery components. This measure is expected to lower costs for the mineral recycling industry, further supporting the EV ecosystem.
Additionally, Finance Minister Nirmala Sitharaman announced a National Manufacturing Mission to bolster the 'Make in India' initiative. The mission will provide policy support, execution roadmaps, and governance frameworks for industries, including Clean Tech manufacturing.
The government also plans to develop a manufacturing ecosystem for solar PV cells, EV batteries, motors, controllers, wind turbines, and grid-scale batteries.
Industry leaders view these measures as essential steps toward strengthening the EV supply chain. Shailesh Chandra, President of the Society of Indian Automobiles, highlighted the importance of the Export Promotion Mission, which aims to integrate Indian manufacturers into global supply chains and expand export footprints.
Meanwhile, support for small and medium enterprises (SMEs) has also been enhanced. The Federation of Automobile Dealers Association (FADA) noted that the credit guarantee cover for start-ups has doubled from Rs 10 crore to Rs 20 crore.
This, along with a Rs 10,000 crore Fund-of-Funds for start-ups, is expected to boost auto-tech innovation, fleet leasing models, and last-mile delivery businesses.
However, some industry players feel the budget falls short in certain areas. Despite expectations, there were no significant incentives to expand EV charging infrastructure.“Electric mobility needs faster adoption.
We expected proactive measures beyond PM E-Drive to position India as a global EV leader,” said Abhijeet Sinha, Project Director, National Highways for Electric Vehicles (NHEV).
Another disappointment was the lack of a revision in GST rates for lithium-ion batteries and EV charging infrastructure.
“While EVs are taxed at 5 per cent, batteries and charging services still attract 18 per cent GST. This mismatch needs urgent attention,” said Ankit Sharma, CEO & Co-Founder of Vidyuta.
On a positive note, the proposed personal income tax revisions could boost disposable incomes, potentially driving higher automobile sales.
After a sluggish 5 per cent growth in car sales in 2024, the industry is hopeful that these measures will revive consumer sentiment.
While the Budget 2024 has provided a solid push for India's EV sector, the industry remains hopeful for further policy interventions to accelerate EV adoption and infrastructure expansion.
(KNN Bureau)
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