As the Union Budget 2025-26 approaches, automakers across India are voicing their expectations for policies that will drive sustainable growth, boost consumer spending, and accelerate the adoption of green technologies. The automobile industry, a key pillar of India’s economy, is at a crossroads, with early signs of a slowdown in growth. To navigate these challenges, automakers are urging the government to introduce measures that not only support the sector but also align with global trends in sustainability and innovation.
In this blog, we’ll explore the key demands of automakers, their vision for the future, and how the upcoming budget can shape the trajectory of the Indian automobile industry.
Contents
What Automakers Are Asking for in Budget 2025
1. Support for Green Technology and Alternative Fuels
One of the top priorities for automakers is the promotion of green technologies and alternative fuels. Industry leaders are calling for merit-based policies that encourage the adoption of sustainable mobility solutions. These policies would help popularize cleaner technologies and reduce reliance on fossil fuels.
- Vikram Gulati, Country Head of Toyota Kirloskar Motor, emphasized the need for government support to phase out polluting vehicles through scrappage incentives. He believes this will not only boost demand for new-generation vehicles but also contribute to a cleaner environment.
2. Building a Robust EV Ecosystem
The transition to electric vehicles (EVs) is a major focus for automakers. However, the lack of adequate infrastructure remains a significant barrier. Automakers are urging the government to allocate funds for expanding EV charging networks and simplifying the GST structure for EVs and their components.
- Piyush Arora, MD & CEO of Skoda Auto Volkswagen India, highlighted the importance of budgetary support for EV infrastructure, which he believes will accelerate the shift to sustainable mobility.
3. Boosting Consumer Spending
With signs of a slowdown in the automobile sector, automakers are calling for measures to increase disposable income among consumers. Higher disposable income would lead to increased spending on vehicles, helping the industry maintain robust growth.
- Jyoti Malhotra, MD of Volvo Car India, stressed the need for incentives that encourage consumer spending and skill development programs to meet the evolving demands of the sector.
4. Policy Stability and Long-Term Vision
Automakers are also seeking policy stability and a long-term vision for tax structures that cater to various automotive technologies. This would provide clarity and confidence for businesses to invest in innovation and product development.
- Santosh Iyer, MD & CEO of Mercedes-Benz India, emphasized the importance of continued incentives for battery electric vehicles (BEVs) and investments in research and development (R&D) to position India as a global leader in green mobility.
Why Infrastructure Matters for Automakers
1. Road and Charging Infrastructure
Automakers believe that investments in better road infrastructure and an expanded EV charging network are essential for the growth of the industry. These measures would not only improve the driving experience but also encourage more consumers to switch to electric vehicles.
- Narayan Subramaniam, CEO of Ultraviolette, pointed out that making Production Linked Incentive (PLI) schemes more accessible to startups could be a game-changer for the industry. It would empower homegrown innovators to push the boundaries of technology and design.
2. Reducing Trade Barriers
Simplifying regulatory frameworks and reducing trade barriers can help integrate India into the global supply chain. This would attract foreign investments, foster innovation, and make India a competitive player in the global automotive market.
- Santosh Iyer added that lowering the cost of doing business would encourage new investments and the development of cutting-edge technologies.
3. Easing Financing Challenges
High interest rates continue to be a challenge for both consumers and businesses, especially when it comes to financing EV purchases and infrastructure development. Automakers are hoping for measures that ease financing conditions to make EVs more accessible.
- Uday Narang, Founder of Omega Seiki, emphasized the need for government intervention to address these challenges and foster widespread EV adoption.
The Broader Economic Impact of Automakers’ Demands
The automobile sector is not just about vehicles; it’s a critical driver of India’s economic growth. Automakers believe that a budget focused on infrastructure, sustainable mobility, and industrial competitiveness will have far-reaching benefits for the country.
1. Empowering Young India
With India’s youth becoming increasingly mobile and tech-savvy, automakers are calling for policies that cater to their aspirations. A supportive business environment can encourage entrepreneurship and innovation in the sector.
- Raghupati Singhania, Chairman of JK Tyre & Industries, highlighted the importance of addressing the needs of young, entrepreneurial Indians through forward-looking policies.
2. Positioning India Globally
By enhancing India’s global competitiveness in the BEV value chain and reducing the cost of doing business, the government can position the country as a leader in the global automotive market.
Conclusion: A Critical Moment for Automakers and the Economy
The Union Budget 2025-26 is a crucial opportunity for the government to address the pressing needs of the automobile sector. By focusing on green technology, EV infrastructure, consumer spending, and policy stability, the government can ensure sustainable growth for automakers while contributing to India’s broader economic goals.
Automakers are optimistic that the budget will provide the necessary support to navigate global uncertainties, drive innovation, and position India as a global leader in the automotive industry. With the right measures, the government can not only revitalize the sector but also pave the way for a cleaner, greener, and more prosperous future.
Why This Matters
The demands of automakers are not just about business—they’re about shaping the future of mobility in India. From cleaner air to better roads and more accessible EVs, the benefits of a supportive budget will ripple across the economy and society. As we await the Union Budget 2025-26, all eyes are on the government to deliver a roadmap that drives innovation, sustainability, and growth.
Also read- Maruti Suzuki’s Bold Move: Short-Term Car Leases for EV Buyers in 2025.
FAQS
What are automakers expecting from the Union Budget 2025?
Automakers are seeking government support for green technologies, alternative fuels, and the development of the electric vehicle (EV) ecosystem. They are also asking for measures to boost consumer spending, simplify tax structures, and improve road and charging infrastructure.
Why is the EV ecosystem important for automakers?
The EV ecosystem, including charging infrastructure, is critical for accelerating the adoption of electric vehicles. A robust EV network will make EVs more accessible to consumers and businesses, helping automakers transition to sustainable mobility solutions.
