Union Budget 2025-26: India's EV Revolution Gets a Boost

In the Union Budget 2025-26's provisions are set to strengthen the EV ecosystem in India, eschew imports and manufacture locally. Customs duty exemptions on lithium-ion battery components, incentives toward EV supply chains, and assistance in clean mobility solutions would include among the key policy announcements. These initiatives are viewed by the vendors as a pivotal step towards turning India into an EV manufacturing hub, bringing down costs, and promoting innovation.

The National Manufacturing Mission and National Critical Mineral Mission further reaffirm the government's commitment to clean mobility by ensuring the sustenance of raw material supply chains and reducing cost of production of EVs. The governments promoted localization of battery manufacturing, scopes of motor and controller production and advanced recycling infrastructure to propel not just the adoption of EVs in India, but also to ensure that India emerges as a notable stakeholder in the international sustainable transport agenda.

Some industry analysts opine on how the budgetary provisions will mark the EV world in India:

Saket Mehra, Partner and Auto & EV Industry Leader, Grant Thornton Bharat
The Budget's customs duty cuts on lithium-ion batteries, alongside the National Critical Mineral Mission, mark a key step in strengthening India's EV ecosystem. Lower import costs will make EVs more affordable, while investments in domestic mineral exploration, battery manufacturing, and electrolyte production will drive long-term self-reliance. These initiatives will reduce supply chain vulnerabilities and accelerate India's shift to clean mobility. By fostering innovation, local manufacturing, and resource security, India is positioning itself as a global hub for sustainable transport, ensuring a competitive, resilient EV industry aligned with its Net Zero goals.

Mohal Lalbhai, Co-founder & Group CEO, Matter Motor
The Union Budget 2025 reinforces India's Net Zero 2070 commitment with key measures to strengthen the clean-tech manufacturing ecosystem. The exemption of Basic Customs Duty (BCD) on critical EV minerals and duty-free status for 35 battery components will secure the supply chain, lower costs, and accelerate EV adoption. Support for MSMEs through capital access reforms and compliance ease will drive innovation and India's global manufacturing ambitions. Additionally, tax incentives for green investments and startup-friendly policies will boost clean-tech growth, aligning with the 'Make in India, Make for the World' vision.

Bharath Rao, CEO and Founder of Emobi
The Union Budget 2025 marks a decisive step toward strengthening India's EV manufacturing ecosystem. The exemption of customs duties on capital goods for lithium-ion battery production, will help lower capex costs for advanced battery pack manufacturing and accelerate domestic battery development. Further the support for domestic manufacturing of motors, controllers and critical components will further exchange localised supply chains for EV manufacturing. The announcement of the National Manufacturing Mission further reinforces the government's commitment to supporting innovation and self-reliance in clean mobility.These progressive measures will not only make electric vehicles more affordable but also reduce import dependency, fostering a robust local supply chain. At Emobi, we see this as a pivotal move that will drive greater adoption of EVs, encourage technological advancements, and position India as a global leader in sustainable mobility. We look forward to leveraging these policy initiatives to accelerate our mission of delivering innovative and efficient electric mobility solutions.

Shivam Narang, Managing Director, Khalsa E-vehicle
The Union Budget 2025 laid a strong foundation for India's EV future. By fostering domestic manufacturing, easing battery costs, and promoting clean technology, the government has set the stage for long-term, sustainable growth. The focus on grid-scale batteries will help stabilise the renewable energy grid, ensuring that EVs can be powered by clean energy sources.

The exemption of basic customs duty on lithium-ion battery scrap is another commendable move. It promotes a circular economy by making battery recycling more viable, reducing reliance on fresh raw material imports, and decreasing production costs and environmental impact.

However, to ensure widespread EV adoption, further policy interventions around charging networks, financing models, and end-user incentives will be crucial. If these aspects are addressed in parallel, India has the potential to become a global leader in EV innovation and clean mobility solutions.