The Union Budget 2024, unveiled by Finance Minister Nirmala Sitharaman, sets the groundwork for major advances in local production, technological innovation, and sustainable practices, thereby charting a transformational course for India’s automotive industry. In addition to the significant ₹25,938 crore allocated for the Production Linked Incentive scheme, the budget features a historic ₹11,11,111 crore for capital expenditure, aimed at accelerating infrastructure development. This strong commitment to driving economic growth and generating employment
opportunities is set to benefit the automotive industry, especially as it navigates the shift towards a more connected, intelligent, and sustainable transportation ecosystem. This strategy seeks to support regional manufacturing, technological advancements, and research and development, which are critical for preserving competitive advantage in a world market that is changing quickly.
In order to lower production costs and achieve the target of 30% EV sales by 2030, the Union Budget 2024 contains significant steps to strengthen India’s automotive industry, one of which is the elimination of import duties on 25 important minerals for EV batteries. This is consistent with the broader Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME III) initiative, which aims to develop a strong EV ecosystem through investments in EV charging infrastructure. Furthermore, the budget allotted ₹26,000 crore for the improvement of infrastructure, thereby improving road connectivity and reducing logistical expenses. These measures will strengthen economic growth and optimise the automotive supply chain. Innovations in smart fuels like hydrogen and biofuels demonstrate India’s dedication to
environmental sustainability, while 5G and IoT technologies are poised to transform vehicle safety and management. With loans available without collateral up to ₹100 crore, the Credit Guarantee Scheme for MSMEs seeks to promote innovation and assist smaller businesses in the automotive sector.
The budget establishes a solid foundation, but implementing it well and resolving current issues will be necessary to succeed. Crucial concerns like EV adoption rates and the full return on infrastructure expenditures will call for quick thinking and attentive observation. The sector is looking forward to further information about how the funds designated for the FAME and EMPS schemes are being used, especially when it comes to the scheme’s potential growth and financial limitations.
In conclusion, the Union Budget offers a thorough plan for the Indian automobile sector that strikes a balance between the advancement of technology, sustainability, and infrastructural development. The budget’s alignment with wider economic and environmental goals sets the industry up for future innovation and growth, supporting India’s ambitions to move from being the third-largest automotive market in the world to a leadership position in automotive excellence.
Anuj Sinha
CEO & Director
Future Mobility Media