The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman on February 1, outlines significant initiatives aimed at promoting clean technology and the automotive sector, reflecting India's ambitions for sustainable development and domestic manufacturing.
The budget emphasizes important provisions, including customs duty exemptions on key materials necessary for electric vehicle (EV) battery production and the overall support for clean technologies, which are fundamental to enhancing India's EV ecosystem.
Executives from the automotive industry welcomed these measures as they signal major progress for both producers and consumers. Girish Wagh, Executive Director of Tata Motors, noted, "The removal of basic customs duties on key materials for battery manufacturing is a strategic move to boost domestic EV production, fostering a sustainable ecosystem, and driving India's transition to a greener economy." This sentiment was echoed by Jyoti Malhotra, Managing Director of Volvo Car India, who welcomed the focus on EV infrastructure and domestic value addition, stating, "The emphasis on domestic value addition for EV batteries and the development of comprehensive EV infrastructure initiatives are encouraging strategies to drive EV adoption across various segments."
The budget detailed concrete actions to break down logistical barriers to EV adoption. Customs duty exemptions on lithium and other raw materials could lower input costs significantly. H S Bhatia, Managing Director, Daewoo India, acknowledged this, asserting, "The exemption of lithium batteries from Basic Customs Duty will give a fillip to the electric vehicle industry and encourage sustainable development." The budget also ensures the removal of other duties on materials like cobalt as part of the government's larger strategy for reducing dependencies on imports and promoting local manufacturing.
Uday Narang, Founder and Chairman of Omega Seiki Pvt. Ltd., emphasized the long-term benefits of these measures: "By eliminating these duties, the government is not only reducing the cost of production for manufacturers but also accelerating the transition toward more affordable and sustainable technologies." This approach aligns with the overarching goals of establishing India as a leading hub for EV manufacturing.
Within this framework, the budget outlines initiatives to ramp up domestic manufacturing capabilities, signifying strong government support for the clean technology sector. Akshay Shekhar, CEO and Co-founder of Kazam, commented, "The 2025 Union Budget takes a strong step toward scaling India’s EV and clean energy ecosystem. By prioritizing clean tech manufacturing, the government is addressing key challenges in EV adoption—especially grid capacity and energy distribution. Incentives for states to improve transmission infrastructure will make charging more reliable and accessible."
This strong focus on clean technology also corresponds with India's ambitious climate goals, as mentioned multiple times within discussions around this budget. The government aims for 50% of the country's installed electricity capacity to come from non-fossil fuels by 2030 and to reduce emissions intensity by 45% relative to 2005 levels. Therefore, the commitment to enhancing domestic capabilities aligns strategically with these environmental targets.
Industry leaders expressed optimism about the future, seeing the budget as inherently transformational. Anjali Bansal, Founding Partner of Avaana Capital, stated, "The strong push for the manufacturing sector, particularly clean-tech manufacturing, will fuel the 'Make in India' initiative and position India as a global leader. This is not just about energy independence, but also about paving the way for innovation and job creation across the sector."
Overall, the Union Budget 2025 reflects substantial investment and strategic thinking aimed at future-proofing India’s automotive and clean tech landscapes. Policymakers and industry leaders agree on the importance of these initiatives as they work to establish India as a competitive player in the green economy, capable of addressing both current needs and future challenges. The path forward includes not only immediate benefits like increased investment and eased regulations but also lays the groundwork for responsible, sustainable growth of the EV market.