Union Budget 2023: What The Indian Automobile Industry Expects
- The government has proposed to focus on providing tax relief for buyers.
- The budget is focused on increasing availability of electric vehicles and fuel-efficient options.
- The budget is also expected to propose various tax cuts and other incentives to produce bikes in India.
The Union Budget 2023 is expected to be a game-changer for the automobile industry as this time around, the budget promises to introduce measures to boost the sector and support growth. The government has proposed to focus on providing tax relief for buyers, increasing incentives for electric vehicles, and providing incentives for companies investing in research and development activities. Additionally, the budget is focused on increasing the availability of electric vehicles and fuel-efficient options, to reduce the carbon footprint of the nation. Moreover, the budget is also expected to propose various tax cuts and other incentives to produce bikes in India.
Dr. Raghupati Singhania, Chairman & MD, JK Tyre & Industries Limited said, “The Indian economy has been displaying robust signs of recovery, post the COVID-induced slump, which is a testament to the country’s innate resiliency and focus. To create a sustainable future and keep the growth momentum on track, the industry expects the Government to implement viable policy reforms and encourage indigenous sectors to reduce India’s import dependency, in line with the essence of Aatmanirbhar Bharat.”
Additionally, the government plans to reduce the customs duties on auto components and increase the availability of credit and finance options for buyers. The government also plans to provide a 20 per cent tax incentive on electric vehicles, promoting their further adoption. Such measures are expected to lead to a reduction in automobile prices and more affordable options for buyers.
A high-ranking official from Toyota Kirloskar Motor said, “The Government has also been pushing for greater self-reliance while directing the future growth towards greener and more environmentally friendly technologies. We are hopeful that keeping in line with this, the policy initiatives will continue to accelerate rapid consumer adoption of green technologies while we, at TKM, would continue to support the Government’s efforts towards shifting the economy and transportation sector towards a greener future that is less dependent on fossil fuels.”
Santosh Iyer, MD & CEO, Mercedes-Benz India said, “We are optimistic about the upcoming Union budget and expect it to be progressive and forward-looking, acting as a catalyst for India’s long-term growth trajectory. The current tax incentives and other benefits should continue for a period of 8-10 years to boost growth in the EV segment, advancing the inflexion point for EVs and making the auto industry gain the critical mass for these vehicles.”
Prashanth Doreswamy, President & CEO, Continental India said, “Considering the fact that the auto industry contributes about a sizeable six per cent to India’s GDP. A reprieve on Goods and Service Tax (GST) will come as a welcome move. The focus over the last year has been on efficiently implementing clean and green mobility, and I hope there to be a relief on the GST levied on EV parts like lithium-ion batteries and ancillaries.”
Mohal Lalbhai, CEO, Matter said, “Since lithium-ion batteries are key for energy efficiency and clean energy, I would urge the government to create tax parity for lithium Ion batteries in line with EVs, i.e., 5 per cent GST on Lithium Ion batteries used in stationary energy storage applications, to help accelerate the nation's clean energy goal.”
To promote the Make in India initiative, the government plans to provide support for local manufacturing and component manufacturing. These measures are set to bring a much-needed boost to the automotive sector, helping it remain competitive and drive innovation.
Rajat Verma, CEO & Founder, Lohum said, “The Prime Minister has rightly acknowledged that India needs to develop self-reliance in energy security and called for a #MakeinIndia circular economy. A circular economy of battery raw materials will boost India’s energy security and uplift domestic manufacturing. Government support can greatly accelerate this shift and magnify its rewards, which we hope to see in the budget this year.”
The Union Budget 2023 is also set to bring a transformation in the motorcycle industry with a boost to the industry by introducing several new tax reforms and incentives. It will focus on reducing the cost of production and providing incentives to manufacturers to innovate and develop new products. There are also plans to introduce a new category of motorcycles called 'Green Bikes', which will be either completely electric or hybrid, meaning they will be powered by both petrol and electric engines.
The Union Budget 2023 is being presented at a crucial juncture of geo-political uncertainties, high inflation, and slowing world economic growth. The budget will help the EV industry move forward on its way towards faster adoption of EVs. Calibrated steps will be needed to maintain the ongoing positive economic growth curve. The industry can further go through a phase of an unstable supply chain if a recession hits the major markets and the extremely rigid stand taken on some of the policies like FAME on premature localisation.