NEW DELHI: All eyes are on the Interim Budget 2024, which will be presented in Lok Sabha by Union Finance Minister Nirmala Sitharaman on February 1. Expectations are high for the new announcements and policy changes announced in previous Budgets. The Indian automobile industry wants to move faster towards green mobility with the help of new government policies and laws, tax benefits and incentives, and support for infrastructure development.
The two-wheeler industry has benefited significantly from EV incentives and popularity policy, according to Neeraj Rajmohan, co-founder and CTO, Ultraviolette. “The lower GST rates on electric vehicles and chargers have helped reduce the price gap between electric vehicles and petrol-powered vehicles,” he said. Regarding the FAME subsidy, due to the price cap for eligible electric vehicles, it does not apply to us given the nature of our offering, but we recognize the government's rationale and look forward to increased support. “We believe that any extension of the FAME support and removal of all restrictions on the factory price of electric vehicles would significantly improve our position.”
In order to promote globalization and promote the 'Make in India' program for electric vehicles, he said, "Encouraging multiple sectors is crucial, and the technology, being global, should not be restricted. As for electric vehicle exports, we have begun to reap the benefits, especially as we start exporting vehicles to developed countries. We look forward to reaping additional benefits associated with 'Make in India' for the global market, promoting innovation and growth. We eagerly anticipate the favorable developments to come. “With our vision of technological advancement, sustainability and expansion into the global market.
Financial benefits
On the need to reduce GST rates for electric vehicles and further reduce import duties on electric vehicle components in the Interim Budget 2024, Dinesh Arjun, co-founder and CEO of Raptee Energy, said, “As the electric vehicle industry prepares for significant growth and in the coming years, it is imperative that the government is working to strengthen the supportive ecosystem. To stimulate investment opportunities, there must be encouragement for potential investors, along with fundamental reductions in GST rates for electric vehicles and charging stations. Moreover, the burden on the industry can be reduced by reducing import duties on electronic components. The industry is particularly hoping for a significant reduction in GST, with the aim of reducing it from 18% to 5% specifically for lithium-ion battery packs and cells, given their crucial role in the electric vehicle sector. Concerted budgetary efforts are crucial to improve the ease of doing business and facilitate entry into the market for local players.”
“Given the momentum we are seeing in the automobile sector, we ask for relief in GST on auto parts and incentives for exports. We have invested in SCT in a technology hub, as well as in products and processes to be globally competitive and will align with the ‘Make in India’ strategy. We would like to see the Budget provide incentives to set up a world-class competitive auto hub here to serve local car brands and encourage global OEMs to source more spare parts from India,” said Sujan, CEO, Sujan ContiTech AVS Private Limited.
“We are optimistic that the interim budget will drive sustainable economic growth,” said Raghupathi Singhania, Chairman and Managing Director, JK Tire & Industries. We expect impressive growth in GDP, supported by progressive policy measures for business, investment and resilience. Focus on last-mile communications, infrastructure, and consistent automobile policies will drive sector expansion. A strong budget is vital for India to become the world's third largest economy.
After sales
Aftermarket players like BluSmart and Zoomcar expect Budget 2024 to provide tax rationalization for electric vehicles, mobility apps to facilitate transportation and involve real estate developers in developing EV charging infrastructure in India.
“Last year's budget has paved the way for increased adoption of electric vehicles in India, leading to a sharp shift in customers' mental models to make greener and more eco-friendly decisions,” said Greg Moran, CEO and Co-Founder, Zoomcar. He further added, “Union Budget 2024 will pave the way, the path towards innovative policies that accelerate sustainable mobility solutions and enhance economic resilience that will help customers with cost-effective solutions and mobility applications to support the evolution of transportation in the automotive industry.”
Automotive components
Automotive components play an important role in the industry, which is why players like Dana and Uno Minda have high expectations in the 2024 budget, as they want the next reforms for the industry.
N K Minda, Chairman and CEO, Uno Minda said: “We appreciate the recent initiative of government policies such as PLI, FAME and BNCAP to stimulate growth; However, in order to build on this momentum, we seek greater policy intervention to rationalize the GST structure for automobile components, tax incentives and benefits for research and development, and implementation of standardized tariff structures for automotive components.”
Furthermore, he said extending the exemption period under Section 115BAB for new manufacturing companies until March 31, 2026 would encourage increased investment and job creation.
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