As India prepares for the Union Budget 2026, the automotive industry has outlined several expectations aimed at boosting growth, enhancing competitiveness, and accelerating the adoption of new technologies. The sector, which plays a crucial role in the country’s manufacturing and employment landscape, has highlighted five key areas where government support is needed.
1. Long-term Policy Clarity
Automakers are urging the government to provide clear and consistent policies that extend beyond short-term budget cycles. Long-term clarity on vehicle emission norms, localisation targets, and EV adoption timelines is critical for manufacturers to plan investments, research and development, and production strategies. Predictable policies can also attract foreign direct investment and foster innovation in the sector.
2. EV Infrastructure Development
The push for electric mobility is central to the industry’s agenda. Companies are calling for accelerated development of EV charging networks, battery swapping stations, and incentives for private players to invest in charging infrastructure. A robust EV ecosystem is essential to support growing demand and achieve India’s climate and sustainability targets. Improved infrastructure will also reduce range anxiety among consumers and encourage wider EV adoption.
3. Tax Rationalisation
Rationalising taxes, duties, and levies on vehicles, components, and EVs is another major expectation. Automakers are seeking reductions in GST and import duties, particularly for green vehicles and advanced technologies. Tax rationalisation can lower costs, make vehicles more affordable for buyers, and stimulate domestic demand, ultimately benefiting the overall economy.
4. Supply-Chain Support
Recent disruptions in global and domestic supply chains, especially for semiconductors and critical automotive components, have affected production and delivery. Industry leaders are requesting support measures such as incentives for local manufacturing of chips, raw materials, and other critical parts. Strengthening supply chains will ensure smoother production, reduce dependency on imports, and enhance the resilience of the automotive sector.
5. Incentives for Future-Ready Investments
To remain globally competitive, Indian automakers are looking for incentives for investments in green manufacturing, AI-driven production, electric drivetrains, and next-generation vehicle technologies. Such measures will encourage companies to adopt sustainable practices, enhance technology adoption, and position India as a hub for advanced and eco-friendly automotive manufacturing.
The industry believes that these measures, if included in Union Budget 2026, will support growth, create jobs, accelerate EV adoption, and strengthen India’s position in the global automotive landscape. By focusing on infrastructure, policy clarity, tax support, supply chains, and future-ready investments, the government can help ensure the sector remains resilient and innovative.
