Union Budget 2024 Pushes For Make In India EVs

Union Budget 2024: This budgets focus on boosting manufacturing and agriculture will spur more automobile sales especially from the rural areas

Union Finance Minister, Nirmala Sitharaman had doubled the FAME II outlay to 5,172 crore for the Budget FY24

Source : Somnath Chatterjee

While the Finance Minister, Nirmala Sitharaman did not mention the automobile industry in her budget speech or the much awaited FAME III, the Government is pushing for greater localisation for EVs and it has taken steps for that. This is due to the exemption of lithium, copper and cobalt from custom duties and that is also to push for more lithium-ion battery manufacturing in India.

Lithium and cobalt are some of the crucial components in lithium-ion batteries and the exemption of duties is a step in the right direction for making for EVs in India. In terms of the Faster Adoption and Manufacturing of Hybrid and Electric vehicles in India, the budget for the Fiscal 2024-25, has been proposed to be nearly half the allocation at 2,671 crore.

Union Finance Minister, Nirmala Sitharaman had doubled the FAME II outlay to 5,172 crore for the Budget FY24. The FAME scheme was first implemented in 2015. Due to this scheme, the adoption for EVs grew with faster adoption for EV 2 wheelers especially. That said, the reduction in subsidies have impact electric vehicle sales particularly in the two wheeler category. For EV, the price of the battery to the end product in terms of the gap between regular cars remains the challenge for EV makers.

However, this budgets focus on boosting manufacturing and agriculture will spur more automobile sales especially from the rural areas. The Finance Minister has allocated 2.66 lakh crore for rural development and it is crucial for the automobile industry too.