The Union Budget plays a pivotal role in shaping India’s economic trajectory, and this year, the government has reinforced its commitment to the electric vehicle (EV) sector, particularly benefiting MSMEs (Micro, Small, and Medium Enterprises). Aimed at accelerating domestic EV and battery production, the budget introduces key incentives in three critical areas:
- Customs duty exemptions on 35 capital goods essential for EV battery manufacturing.
- Support for local production of motors, controllers, and other key EV components.
- Integration of EV manufacturing with the broader Clean Tech initiative to enhance domestic value addition.
To position India as a global hub for EV and battery production, the government has unveiled a comprehensive Clean Tech manufacturing support program. This initiative not only strengthens domestic supply chains for solar PV cells, EV batteries, motors, and controllers but also expands the list of capital goods eligible for tax exemptions.
Beyond manufacturing, the budget emphasizes the development of a robust EV ecosystem, covering battery recycling, charging infrastructure, and advancements in battery technology. The focus on high-capacity batteries and research in this space is expected to drive innovation and sustainability.
For MSMEs—integral to the auto component industry—the budget provisions enhanced working capital support, technology upgradation funds, and improved credit access, ensuring they remain competitive in the evolving EV landscape.
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