EV Industry eyes tax cuts, financial boosts, and infra upgrades in Union Budget 2025-26

New Delhi [India], January 27 (ANI): As the Union government gears for the Union Budget 2025-26, players in electric Vehicles (EVs) have urged Finance Minister Nirmala Sitharaman to introduce transformative reforms that enhance affordability, infrastructure, and innovation in the sector to tackle both manufacturing and consumer-centric challenges.
The Union government looks proactive to promote the sector. The centre has introduced several schemes such as Faster Adoption and Manufacturing of (Hybrid and Electric Vehicles in India (FAME India) Schemes, the Production Linked Incentive (PLI) Scheme for Automobile and Auto Component Industry in India (PLI-Auto), LI Scheme for Advanced Chemistry Cell (ACC), PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme, PM e-Bus Sewa-Payment Security Mechanism (PSM) Scheme, Scheme for Promotion of Manufacturing of Electric Passenger Cars in India (SPMEPCI) among others to promote the sector.
As India needs EVs to address environmental pollution, energy security, and economic sustainability, the industry players have suggested measures that could enhance the government's efforts.
Anshul Gupta, Managing Director of OPG Mobility, emphasised the rapid growth of the EV industry driven by sustainability goals.
"Addressing infrastructure gaps, supply chain inefficiencies, and high manufacturing costs must take centre stage to make EVs more affordable and accessible to the masses," Gupta said.
He added, "We urge the government to extend robust financial support through subsidies, tax rebates, and investments in public charging infrastructure. Empowering tier 2 and tier 3 cities with affordable mobility solutions, such as electric two-wheelers and three-wheelers, can significantly accelerate EV adoption across diverse demographics."
Similarly, Dinkar Agrawal, Founder, CTO, and COO of Oben Electric, called for structural reforms to reduce costs and encourage manufacturing. "Simplifying the GST structure with a uniform 5 per cent tax across EVs, components, and charging infrastructure is essential to reducing costs and fostering growth. Resolving the inverted GST structure on raw materials will ease working capital pressures and encourage sustainable manufacturing," Agrawal said.
He also emphasised the importance of consumer-centric measures like "reduced interest rates on EV loans and targeted subsidies" to bridge the affordability gap.
Kunal Arya, Co-Founder and Managing Director at ZELIO E Mobility Ltd, advocated for consistent policy backing and financial support. "the government must introduce long-term subsidies akin to the FAME scheme, which will not only support the industry's expansion but also encourage widespread consumer adoption of electric vehicles," Arya said.
He urged the government to reduce the GST on spare parts from 28 per cent to 5-12 per cent, noting, "This adjustment will substantially reduce production costs, allowing manufacturers to pass on the benefits to consumers, thereby further accelerating the adoption of electric vehicles."
Ishaan Parwanda, Director of Trinity Touch, pointed out disparities in the current tax structure and the need for domestic production incentives. "While EVs enjoy a 5% GST, lithium-ion batteries and charging services are subjected to an 18 per cent GST. We urge the government to reduce this GST rate to 5% for both charging services and lithium-ion batteries," Parwanda said.
He also stressed the importance of promoting Atmanirbhar Bharat by introducing special Production Linked Incentives (PLI) for EV components to boost local production and reduce reliance on imports.
Raghav Arora, Co-Founder and CTO of Statiq, highlighted the role of technology in driving EV adoption. "Technology development will play a pivotal role in accelerating the growth of the electric vehicle ecosystem in India. Innovations in battery technology, charging infrastructure, and smart mobility solutions are essential to overcoming existing challenges," Arora said.
He called on the government to reduce the GST on charging services and batteries to 5 per cent, adding, "Lowering these taxes would make EV adoption more affordable and drive higher demand for electric vehicles, aligning with our vision for a greener and more sustainable future."
As the Union Budget 2025 approaches, the EV industry remains hopeful for decisive government action to address infrastructure gaps, streamline taxes, and foster innovation.
The industry players believe that these measure will propel the country towards goal of becoming a key player in the sustainable mobility. (ANI)