Union Budget 2024: Automobile industry to get benefitted or not?

Union Budget 2024: The speech of our Finance Minister Nirmala Sitharaman did not mention any direct announcements about the automotive industry. Finance Minister Nirmala Sitharaman has indirectly announced that the EV industry wherein Nirmala Sitharaman has mentioned fully exempting the custom duties on the 25 critical minerals and reducing BCD on two of them. 

Nirmala Sitharaman said, “ This will provide a major fillip to the processing and refining of such minerals and help secure their availability for these strategic and important sectors, “

In the Interim Budget 2024, there was not much expected for the automobile sector. Though some aspects of the Budget have an impact directly or indirectly on the automotive sector, there were a few key highlights from the automotive sector. Finance Minister Nirmala Sitharaman did not speak about the FAME-II subsidy for EV vehicles. There was a focus on MSMEs, logistics, and mobility solutions. In India’s quest to go carbon neutral by 2070, EVs alone will not help. There has to be a combination of technological solutions to meet this target. 

In the Union Budget of 2023, the auto industry recorded some major announcements from Nirmala Sitharaman. For EVs, the customs duties on the imports of the goods used to manufacture lithium batteries have been reduced to 13 per cent from 21 per cent. The National Hydrogen Mission, which promotes hydrogen as a clean energy source, will receive Rs. 19,700 crores in the budget. The government even announced the voluntary scrappage policy in the budget for 2023. 

In the Union Budget of 2022, it received high targets for national highways along with the EV battery policy, support for MSMEs, and tax incentives for startups. The Budget proposed increasing import duty on certain components (such as braking systems, electronic and engine parts like lights, to 15 per cent from 7.5 per cent -10 per cent earlier.