No tax on electric vehicles..!? EV sector to gain importance..!?

With the increasing importance of electric vehicles in the country, the indian government is making various efforts to accelerate it. In that regard, there is an expectation that electric vehicles will be given full tax exemption in today's budget. The indian automobile sector has undergone a profound transformation over the years. It has gone from being an import-dependent market to a powerhouse that is a safe haven for manufacturers around the world. The changes have been made possible by government policies. The transformation of the automobile sector into a powerhouse today is driven by changing preferences of customers, sustainable and affordable mobility, and the support of profound government policies. The indian government's deep-rooted efforts to indigenize EV manufacturing have helped the indian auto sector reach a new stage of growth in the past few years. government schemes like the Manufacturing Linked Incentive Scheme for Automobiles, FAME2, and the recent PM E-Drive and SMEC have all acted as significant catalysts for growth. More schemes like the Pm E-Drive scheme aimed at electrification of public transport and development of EV infrastructure have crossed Rs 332 crore. This has helped the nation significantly achieve its overall sustainability and EV shift goals.

According to online news reports, the new 2025-26 Union Budget will direct funds and overall emphasis towards eco-friendliness-innovation and employment generation. The government will pay special attention to promoting the manufacturing of EVs in India. Several policies have been launched for the same purpose, including auto PLI, bmw e-Drive, and a new scheme to promote the production of electric passenger cars. According to the schemes, these schemes will help the government attract investment in the country and complement the overall shift toward the EV market.
With the growing rise of the EV market, lithium-ion cell imports are a threat to the growth of the automotive sector. The government will definitely promote schemes that allow new battery manufacturers to grow against the war against low-cost imported batteries. These policies will protect the growing market for battery manufacturers and help EV manufacturing in India. The incentive-linked manufacturing scheme has already yielded good results, as manufacturers like hyundai and Suzuki have already shifted a faulty part of their EV battery production to India. The new budget may increase customs duty on some EV components, for which the country provides a conducive environment for manufacturing.
With the growing needs of the nation, the focus should be on the overall expansion of charging stations and battery recycling facilities. While expanding EV infrastructure is a big task, it further leads to the question of how batteries will be recycled. A significant focus on recycling from this point on will lead to the complete development of the local EV market.

The new Union Budget should bring changes in the reverse charge structure for EVs in GST. This can be done by bringing necessary changes in the refund process for EV purchases and beyond that, rationalizing the GST rate for hybrid vehicles. All the changes mentioned above can be introduced to ensure India's position as a world leader in the EV shift.