February 1, 2024 will be the day when the Union Government of India will announce the interim budget. This will be the last budget passed by the central government before the election and all eyes will be on the Finance Minister Nirmala Sitharaman to hopefully announce a slew of populist measures.
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Uday Narang, Chairman, Omega Seiki Mobility: “For India’s electric vehicle revolution to truly shift gears, three factors must align: affordability, accessibility, and sustainability. Affordability hinges on continued government support: Reduced GST on lithium-ion batteries and the introduction of FAME 3 with clarity on subsidy of electric trucks, alongside domestic battery manufacturing and skilling initiatives. Accessibility demands a robust charging infrastructure that reaches beyond metros, powered by clean energy sources and bolstered by open data standards for seamless charging. Sustainability, a focus on responsible end-of-life battery management, with R&D in recycling and circular economy measures leading the way. Prioritising these pillars is the only way India can unlock the true potential and adoption of electric vehicles.”
“We applaud the government’s progressive initiatives like eFAST and Gati Shakti, which have paved the way for a cleaner India. To propel the commercial EV and logistics fleet business ahead, the biggest impact will come from long-term incentive support for fleet operators, making commercial EVs accessible and cost-effective, which will help companies like ours to expand the fleets. This would foster a thriving ecosystem of sustainable transportation.
Ajinkya Firodia, MD, Kinetic Engineering: “In the upcoming 2024 budget, we are looking forward to several changes in the economic landscape. Foremost among them is the anticipation of subsidies for companies undertaking substantial, long-term investments, fostering economic growth. With a significant portion of electronic key components still imported, there is a need to incentivise local manufacturing of crucial elements like battery cells and magnets for motors. Enhanced import duties for non-electronic components aim to bolster domestic manufacturing, addressing concerns about substandard imported goods tarnishing the sector’s reputation.”
“Additionally, a reevaluation of the import structure for electric vehicles is sought, as the existing system results in cash blockage owing to disparities in Goods and Services Tax (GST) rates. Moreover, the startup community is anticipating favourable outcomes with the possibility of government loans and investments, poised to level the playing field with more established counterparts. Additionally, a proactive measure is anticipated in the field of Electric Vehicle (EV) adoption, where accelerated or depreciated benefits are expected, particularly for corporate purchases. This move is crucial for facilitating a seamless transition for delivery-based models to embrace EV technology. To alleviate the financial strains faced by EV companies, there is an earnest anticipation for a quicker mechanism for the disbursement of FAME subsidies.”
“To position India as a hub for EV manufacturing and exporting, the budget is anticipated to introduce additional incentives for EV exports, capitalising on the comparative advantage of lower import duties in Europe compared to China. Thus, the 2024 budget is eagerly awaited to provide the necessary support for economic growth, innovation, and sustainability,” added Firodia.
Maxson Lewis – Managing Director & CEO at Magenta Mobility: “Amped-up R&D funding can lead to lighter, safer batteries being manufactured in India. Thus, lowering operating costs for logistics fleets, while extending kilometre range and boosting performance. Finally, we urge for a clear, stable policy framework, including a program incentivising the replacement of polluting vehicles with electric alternatives, accelerating sustainable transportation adoption and providing a predictable environment for long-term planning and investment in fleets. With these measures, we can work with the government to curb carbon emissions and ignite robust economic growth, powered by safe, smart and sustainable logistics solutions.”
Raman Bhatia, Founder and MD, Servotech Power Systems: “The government must align its policies with the net-zero goal and sustainable development. The targeted implementation of Production-Linked Incentive (PLI) schemes, specifically tailored for EV charging companies, stands out as a critical step. Continued support through demand-side incentives, such as tax deductions for electric vehicle purchasers and an extension of FAME-II subsidies or introduction of FAME-III policy, further reinforces the commitment to a green transition. The government should allocate substantial funds for charging infrastructure leading to the development of a robust EV charging ecosystem, especially in Tier II and Tier III cities. Prioritising open data standards and APIs for charging networks in the budget is essential, fostering interoperability and nurturing a thriving software ecosystem. An impactful proposal to reduce GST on lithium batteries from 18% to 5% is positioned to significantly cut the overall cost of acquiring EVs. Recognising batteries as a major cost component, this move enhances the attractiveness of EVs for prospective buyers, paving the way for a sustainable and thriving electric vehicle ecosystem in the country.”