Indian automotive industry is one of the major growth drivers for the Indian economy, contributing 49% to India's manufacturing GDP and 7.5% to total GDP. The sector also directly and indirectly creates jobs for 36 million people.
By 2026, this number is expected to grow to 65 million. Rising demand for private cars and a growing middle class with rising disposable income have both contributed to the enormous growth of the Indian auto industry in recent years.
Having emerged out of the after effects of pandemic, automotive industry is looking to sustain its growth and it expects support from the government. As the union budget gets announced today, it is going to be all ears. Here are the top five expectations of the industry from the budget:
1) Lowering of GST for components to reduce the overall costs, along with part costs during vehicle service. EV components currently attract are 18 percent or 28 percent GST
2) Support required for promotion of battery refurbishment, reuse (second life) and recycle of batteries
3) Need to indigenize technology and reduce the import duty to bring down the cost and increase demand
4) It is time to boost Research & Development (R&D) for green technologies to support net zero carbon emissions.
5) Manufacturers of electric vehicles want FAME to be extended as the validity of the second phase is set to expire on March 31, 2024.
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