Budget 2025: Here’s why electric vehicles are set to become more affordable in India.

The Indian Union Budget 2025, was announced by Finance Minister Nirmala Sitharaman, and she has given several measures which will lead to strengthening India’s EV industry.

Budget 2025’s Impact on the Indian Automotive Industry

The biggest decision of 2025’s budget is to increase income tax exemption limit to 12 Lakh per annum, (12.75 Lakh for salaried employee, which includes normal reduction). This will increase the overall income of consumers, encouraging them to spend more on the Automotive industry.

This scheme has given a great boost to the developing EV industry in India, as the consumers would be more willing to spend and be a part of the mobility which will power the future.

Basic Customs Duty (BCD)

The FM proposed to remove Basic Customs Duty (BCD) on some important key minerals that are essential for the manufacturing of EV batteries.

The government has given many tax exemptions on minerals like cobalt, zinc, lead, lithium-ion batteries and other scraps. This will indirectly make electric cars more affordable in India, making EVs overall easy to purchase and maintain, and will encourage people to adopt EVs.

The Auto industry has appreciated the government's roadmap for a big transformation, which will help India to achieve its vision of “Viksit Bharat”.

Auto companies have also reacted to this, Girish Wagh, Executive Director, Tata Motors expressed his views on the 2025 Budget, “ Investment of Rs 11 Lakh crore in capital expenditure, which will help to boost the Make in India campaign. The removal of basic custom duty on key materials is quite a remarkable move which will boost the local production of EVs in India. As the infrastructure projects will be underway and improved EV infrastructure, well laid roads, and good connectivity will help to enhance and grow the Auto industry.

Thus the budget of 2025 is concentrated more towards tax relief, EV growth, local manufacturing, and boosting support to major MSMEs and rural areas, which will lay the foundation for a developed Indian Automotive industry.