Finance Minister Nirmala Sitharaman has announced the Union Budget 2023-24 with several key announcements for India’s automotive industry aiding the electric mobility sector. The focus has been on green mobility, the promotion of biogas and hydrogen production. While the customs duty on imported EVs and luxury cars has been increased by 10% to a whopping 70%, there is a tax exemption on capital goods import associated with electric vehicle batteries. We reached out to prominent EV players in the market and gathered a collaborative response on the change. Read on.
The Finance Minister has reduced the custom duty on lithium-ion batteries to 13% from 21% and the subsidies on EV batteries has been extended for another year.
Narayan Subramaniam, Co-Founder and CEO, Ultraviolette Automotive says that electric mobility is the future, and policy support is essential for the growth of the EV ecosystem. “The announcement in the Union Budget of extending concessional duty for lithium-ion cells will give an impetus to Indian manufacturers. With respect to the removal of customs duty on capital goods imported for manufacturing lithium-ion cells, this is a positive step, likely to benefit the Indian EV ecosystem in the long run.”
Extension of customs duty exemption for the manufacture of lithium-ion batteries and removal of customs duty on imported machinery used for manufacturing Li-ion batteries are welcome initiatives as these will help in boosting the demand for EVs, said Uday Narang, Founder and Chairman, Omega Seiki Mobility
Suhas Rajkumar, Founder and CEO, Simple Energy said that it is a growth-oriented budget but we would have liked to see some more specifics for the EV sector – like harmonization and simplification of GST along with a reduction to 5% for batteries would give a fillip to EV adoption. Granting EV sector a PSL status has been a missed opportunity for years and we were hoping for this year’s budget to address it.
Sudarshan Venu, MD, TVS Motor Company comments that this budget is well-rounded. “The FM has put inclusivity, capital expenditure, consumption, digitisation and the middle-class front and centre. The emphasis on increased infrastructure spends and support for lithium-ion battery manufacturing will be a great multiplier for industry overall.”
Rahul Dhoot, Managing Director, Dhoot Transmission said, “The automobile industry, which contributes a sizable chunk to the country’s GDP, has been given a futuristic thrust. The government’s focus on green and clean mobility and allocation of funds for replacing government vehicles will go a long way in transforming the automobile industry. The lifting of duty on lithium-ion batteries and the decision to scrap old polluting vehicles bodes immense growth for automobile manufacturers and will give a fillip to the electric vehicles industry which in turn will invigorate the components industry.”
Jeetender Sharma, Managing Director & Founder, Okinawa Autotech says that the exemption on custom duties on the import of capital goods and machinery required for the manufacture of lithium-ion cells will lead to faster adoption of electric vehicles in the country and aid the development of an efficient EV ecosystem. We also believe that the relief in personal income tax will improve the consumer confidence & purchasing power in the country.”
Kapil Shelke, Founder & CEO, Tork Motors believes that the move will encourage the adoption of cleaner, cost-effective means of travel for their daily commute and the availability of FAME-II subsidy will further boost the sales of electric vehicles in the coming fiscal. Additionally, the extension on customs duty on the import of capital goods and machinery for developing lithium-ion cells would also enable EV manufacturers to localise their products in the long term, leading towards a reduction in the cost of an electric vehicle for the consumer in the years to come, particularly for a brand like ours that are 95% indigenously manufactured in India.”
Mohal Lalbhai, Founder and Group CEO – Matter said, the Union Budget 2023 injects growth into India’s economic trajectory and reaffirms the government’s commitment to the Indian electric vehicle sector. Having “Green Growth” as one of the budget’s foundational pillars made the government’s environmental awareness immediately evident. Multiple schemes mentioned by the government will play a key role in boosting EV adoption in India to help the nation head into the net zero “Panchamrit” goal by 2070.
The indirect tax proposal and the proposal to continue the concessional duty on lithium-ion cells for batteries augur well for the sunrise industry, as it will help promote green energy and mobility, boost domestic manufacturing, encourage exports, and push greater adoption of electric vehicles.
Akshit Bansal, Founder & CEO of, Statiq said, The union budget for 2023-24 will pave the way for the green empowerment of the country and reflects the progressive attitude of the government toward sustainable development. We welcome the vision of the government of India in establishing and boosting the focus on green growth.
As India’s new budget envisions 7 priorities, green growth is among the top priorities of it. In its budget, the government has announced a large sum of Rs 35,000 crore to be allocated towards achieving the net zero goal and energy transition. The government has set its target to reach green hydrogen production of 5 MMT by 2030. This will encourage the private sector involved in green renewable energy-based products to expand their business and invest more in the business of green energy.
