The automotive industry is one of the fastest-growing sectors in India, and the nascent electric vehicle segment being the most lucrative. Industry stakeholders are hoping that the Finance Minister Nirmala Sitharaman has some new sops not only for EV segment but also skilling and safety.
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Akash Gupta, Co-Founder & CEO, Zypp Electric: “Prioritising the electric vehicle (EV) sector is crucial for a sustainable future. First, inclusion in the priority lending scheme will fuel growth by facilitating easier access to capital. To accelerate the adoption of EV-led delivery services, a reduction in GST for EV services from 18% to 5% is imperative. While EV purchases enjoy a 5% GST rate compared to 28% for internal combustion engine (ICE) vehicles, a similar distinction must extend to services. Furthermore, introducing usage-based incentives for EV drivers, in addition to existing FAME buyer incentives, will be a game-changer. Rewarding users based on carbon savings and kilometres driven creates a tangible incentive for sustainable choices.”
“Addressing the last-mile delivery gap is equally critical. Recognising last-mile delivery as a distinct sector under logistics policies is essential, given that one-third of shipments fall within this category. Establishing industry standards, supporting gig delivery partners with tailored schemes, and implementing standard operating procedures (SOPs) will enhance efficiency and foster growth in this vital but often overlooked segment of the logistics industry.”
Durgadutt Nedungadi, Senior VP at Netradyne: “In recent years, India has witnessed a significant surge in road accidents, emphasizing the need for innovative solutions to enhance road safety. We anticipate the budget will introduce measures to promote and incentivize the evolving space of ‘road safety solution providers’. Netradyne’s commitment to being a make-in-India technology aimed at providing global best-in-class driver safety AI solutions, aligns with the broader national goal of reducing road accidents and creating a secure environment for commuters, and we look forward to the Union Budget 2024 as an opportunity for the government to reinforce its dedication to technological progress and road safety.”
Gajanan Gandhe, Country Head and VP, Dana India: “In the 2024 Union Budget, in the context of encouraging high-tech advancements, especially in semiconductors and EV components through the PLI scheme, the government might enhance its impact by fostering research and development partnerships. Collaborative initiatives between industry players and research institutions can accelerate technological innovation, thus reinforcing India’s position as a hub for cutting-edge automotive solutions. Regarding support for startups, the government could establish dedicated funds with clear criteria for financial and data support. Facilitating partnerships between established industry players and startups could create symbiotic relationships, allowing startups to access mentorship and resources, while injecting fresh ideas into the industry.”
Himanshu Arora – CEO & Co-Founder, GoMechanic: “We’ve always viewed the EV sector as a key part of the future of automotive technology. With Budget 2024’s focus on enhancing infrastructure, we feel encouraged about our alignment with these developments. Our team has been steadily preparing for the rise of EVs, equipping our mechanics with the necessary skills in a measured and thoughtful manner. This budget’s emphasis on improved EV charging networks and maintenance facilities mirrors our commitment to evolving alongside the industry.”
Manideep Katepalli, Co-Founder, BikeWo: “Despite last year’s commendable 33% surge in EV registrations, our industry encounters persistent challenges. Chief among these hurdles is the imperative need for robust charging infrastructure, pivotal in inspiring confidence among potential buyers and propelling the widespread adoption of electric vehicles (EVs) as a sustainable mode of transportation.”
“Another barrier remains the relatively higher initial cost of EVs, often deterring consumers. However, the promise of life tax subsidies for electric vehicles and the availability of accessible EV financing options hold immense potential to mitigate this challenge.”
Munira Loliwala, AVP- Strategy and Growth, TeamLease Digital: “As Green technologies and electric mobility are expected to remain in dominance during 2024, industry is poised to witness the rise of EV & 2 wheeler segments. Reduction of GST on the components will reduce the overall cost of the vehicle. Also continued round of FAME scheme and favourable tax benefits for individual buyers will influence sales.”
“Additional PLI schemes will support manufacturing and boost the infrastructure needed for EV charging developments. Budget 2024 is needed to focus on inclusive subsidies, policies and innovative options of financing, insurances, fresher Talent deployment and Skill development programmes to mitigate demand-supply gap.”
Niranjan Nayak, MD, Delta Electronics India: “Firstly, we expect the government to continue offering incentives and subsidies for manufacturing and purchasing EVs. These measures effectively drive demand and lower upfront costs. Extending these incentives and reducing import duties on EV components can make electric vehicles more affordable for everyone. Additionally, a critical focus should be on establishing a widespread charging infrastructure network nationwide. Insufficient charging stations are a concern for potential EV buyers. Allocating budget funds for strategically locating charging stations on highways, in cities, and in residential areas is essential.”
“Furthermore, the government should prioritise research and development in the EV sector. Continued investment in advanced technologies, like battery technology and energy storage solutions, is crucial for long-term growth and sustainability. Provisions in the budget supporting innovation and collaboration between industry players and research institutions would be beneficial.”
“In conclusion, the potential of the EV industry in India is significant, and the upcoming budget can play a pivotal role in realising this potential. Through incentives, developing charging infrastructure, and investing in research and development, the government can further stimulate the sector’s growth.”
Nemin Vora, CEO, Odysse Electric Vehicles: “As we anticipate the union budget for the fiscal year 2024, Odysse, as an electric vehicle (EV) manufacturer, looks forward to a comprehensive and forward-thinking fiscal policy. The electric mobility sector stands at the forefront of transformative change, and we anticipate economic support that reflects the government’s commitment to accelerating this transition. Our expectations include continuation of FAME incentives, robust infrastructure investments, reduced interest rates for EV customers, Dedicated percentage of reserved fund by banks for EV financing and a continued focus on research and development to further propel the growth of the EV industry. A visionary budget can not only drive economic revitalization but also play a pivotal role in creating a sustainable and eco-friendly future.”
Rajat Verma, Founder & CEO, Lohum Cleantech: “Last year’s Union Budget provided vital stimulus for India’s Energy Transition fuelled by an expenditure of Rs 35,000 crore. To promote clean energy and sustainable growth, we saw priority capital investment towards energy transition, provision for inter-state grid integration, viability gap funding for battery energy storage systems, indirect tax revisions encouraging green energy, and more such measures.”
“To effectively accelerate India’s clean energy transition and build a circular battery economy through the Budget 2024-25, the need of the hour now is:
1. To promote circularity and critical minerals, GST on waste LIBs must be reduced from 18% to 5%. GST on waste Lead Acid Batteries is 5% (e-waste). Lithium Ion Batteries (LIBs) should also be included in chapter 85 of GST and taxed at 5%.
2. To reduce GST on LIBs from 18% to 5%. GST on EV is already 5%, so 18% on LIB is creating an inverted duty structure.
3. Reduction of GST on processed ores of Nickel and Cobalt from 18% to 5%. Pre 2021, GST on them was 5%. Further, it increased to 18% to remove the inverted duty structure in the mining industry. But India has no reserves of Nickel & Cobalt, hence no mining either. Thus, rationalization on Nickel & Cobalt serves no purpose, It should be revoked back to 5%.
4. Custom Duty on Cobalt & Nickel ores and concentrates to be decreased from 2.5% to 0%.
“Additionally, we anticipate pivotal new schemes to be announced, including the extension of the FAME scheme to FAME 3, and a comprehensive scheme for manufacturing, refining, recycling, and midstream processing of critical materials.”
Raman Bhatia, Founder & 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. Prioritizing 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. Recognizing 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.”
Varun Goenka, Co-Founder & CEO, Chargeup: “The government of India’s proposed FAME-III plan has indicated that there is continued focus on the development and faster adoption of EVs in India, and that’s encouraging for all ecosystem stakeholders including Chargeup. However, this is also a time when we need to look beyond subsidies for the purchase of electric 2 and 3-wheelers and address other financial concerns that could make a bigger and more positive impact on the market compared to the subsidies. FAME-I and FAME-II did a lot of good to these segments, as the demand was catalyzed and several new EV OEMs came into the market. However, today, there is not much of a difference between the cost of electric and conventional 2 and 3-wheelers. With greater demand, the gap will further close in 2024 and beyond. However, issues like high GST rates, and lack of affordable financing for building EV infrastructure such as Battery-as-a-Service facilities, charging stations, and undertaking R&D is a bigger concern. We expect the Government to reduce GST applicability on EV products and services, and to include the EV as well as battery development, charging networks, and allied services in the priority sector lending list. This would open the doors for investments in the ecosystem, and accelerate India’s EV adoption. Further, the impact of FAME-III subsidies can be enhanced if EV buyers who choose to buy a vehicle without a battery are also covered under it. If the allocation for electric 2- and 3-wheeler subsidies is reduced, and funds are deployed towards other areas of ecosystem building, that would also make a positive impact. We are hopeful that through the upcoming Interim Budget, and the full Union Budget later in the year, the Government of India will address these needs.”
