Auto industry seeks stability in Budget 2024

Khodrocar - India’s automotive industry is banking on the Government’s continued thrust on policy stability, spurring investment and infrastructure development in Budget 2024 which have, as part of the Government’s proficient and agile handling of fiscal policy issues in the last few years amidst global volatility and significant geopolitical risks, successfully shielded the Indian economy from major headwinds and catalysed the automotive industry. Continuing to benefit from recent developments, such as the reduced GST on EVs and chargers as well as road tax considerations which have helped narrow the price gap between EVs and fuel-based vehicles, the industry is batting for reduction in both input and output Goods and Service Tax (GST) for EVs and spare part.

Swapnesh R Maru, Deputy Managing Director – Corporate Planning and Manufacturing, Toyota Kirloskar Motor (TKM) considers a sustained growth path towards manufacturing excellence to be critical to further enhance the country’s global competitiveness. "The emphasis given to the manufacturing sector through schemes such as PLI and significant focus towards both physical and digital infrastructure along with other measures including efforts to improve the ease of doing business has attracted large inflow of investments. Notably, the automotive sector also saw an upswing,” says Maru.

Santosh Iyer, Managing Director & CEO, Mercedes-Benz India is also batting for capex on infrastructural projects to continue, aiding the automotive sector. At the same time, Iyer draws attention to the luxury car industry’s significant value contribution to the GDP. "Our wish for a rationalized duty structure and GST stays on priority,” says Iyer.

Raghupati Singhania, Chairman & Managing Director, JK Tyre & Industries flags the need for consistent automotive policies alongwith thrust on last-mile connectivity and infrastructure to propel sectoral expansion. "We’re optimistic about the Interim Budget driving sustained economic growth. We expect impressive GDP growth, supported by progressive policy measures for business, investments and resilience,” says Singhania.

Niraj Rajmohan, Co-Founder and CTO, Ultraviolette highlights two important expectations, first being additional benefits associated with ‘Make in India’ for the global market, fostering innovation and growth. This is critical, says Rajmohan, when it comes to EV exports. "The industry is starting to reap the benefits, particularly as we embark on exporting vehicles to first-world countries. This marks a significant shift from the traditional vehicle export landscape, which is usually directed towards developing markets. We eagerly anticipate favorable developments that align with our vision for technological advancements, sustainability, and global market expansion,” says Rajmohan.

With the previous year Budget 2023-24 focus on sustainable mobility playing a pivotal role in the successful realization of the target of 1 million electric two-wheelers and providing crucial support to the industry, there is strong anticipation for a further boost in support for EV infrastructure in the country through provisions for increased financing opportunities, propelling research and development to a larger scale. Voicing the thought, Yatin Gupte, Chairman & Managing Director, Wardwizard Innovations & Mobility says, "This, in turn, would open doors for substantial investments in the ecosystem, accelerating India’s overall adoption of EVs. To push the Atmanirbharta mission of the Government, Gupte also highlights the call for added incentives specifically directed at Indian original equipment manufacturers (OEMs), aiming to stimulate advancements in localizing EV technology, fortifying the indigenous industry, and contributing to a more self-reliant and progressive economic landscape for the industry. Rajmohan also seeks extension of the FAME subsidy and removing all caps on the ex-factory price of EVs which would greatly enhance the industry position. When the government launches initiatives that encompass technology development in India, we advocate for a subsidy structure without segment caps.

Encouraging multiple segments is crucial, and technology, being universal, shouldn’t be restricted. Importantly, the industry is also looking at continued support through sufficient allocations to education and skilling sectors that capitalizes on the country’s demographic dividend and which need to be aligned to the rapidly evolving technological changes. "Implementing hi-tech skilling programmes that extend beyond geographical boundaries to reach rural markets will be pivotal in addressing the shortage of skilled manpower and ensuring the production of globally competitive products and services,” says Maru.

Confident that the Government will continue its push towards shifting the economy and transportation sector to a greener future less dependent on fossil fuels, Maru points out that this includes policy support to various technologies that utilizes natural and indigenous energy sources such as solar, wind energy, biofuels like ethanol and biogas.