India’s electric vehicle (EV) market has experienced explosive growth, with sales surpassing over 2 million units in the last fiscal year and passenger EV sales nearly doubling within six months in 2025. This surge highlights a nation rapidly embracing electric mobility, driven by technological maturity, expanding infrastructure, and increasing policy support. The market now represents around 5% of total passenger vehicle sales, nearly doubling from the previous year, an important milestone on the journey to achieve a 30% EV market share by 2030.
This transformation is not just about numbers, but about the lived experiences of entrepreneurs and innovators who build and operate within this ecosystem daily. The opportunity presented by Budget 2026 is critical; it could serve as a springboard to propel India beyond early adoption phases and into robust ecosystem acceleration. India already has proven its ability to develop world-class EVs through frugal engineering and local innovation. Still, the challenge now is to create a supply chain that is resilient, localized, and ready to support sustained growth. Success will rely not only on technology but also on deep policy engagement and on-ground execution.
A glaring gap remains in India’s domestic EV supply chain. While assembly and software capabilities are progressing, key components like motors, controllers, battery management systems, and power electronics largely remain imported. This reliance raises costs and impacts reliability, which is especially detrimental for fleet operators who need dependable uptime to maintain livelihoods. Budget 2026 could be transformative by promoting localized manufacturing through tax incentives for MSMEs, GST reductions on raw materials, and encouragement of battery chemistries optimized for Indian climatic and usage patterns. Achieving self-reliance here is fundamental to the country’s “Atmanirbhar” vision.
Alongside supply chain localization, micro-factories offer a revolutionary manufacturing model well-aligned with India’s economic and social fabric. Traditional automotive manufacturing typically depends on large, centralized plants, which are less adaptable to regional needs. Micro-factories, being smaller, agile, and embedded within local communities, decrease logistics costs and foster local employment. They also make regional product customization a reality. Evidence from decentralized production models shows how micro-factories help accelerate vehicle deployment in Tier-2 and Tier-3 cities, while nurturing local vendor ecosystems. Budget incentives aimed at facilitating capital access, building regional manufacturing clusters, and shared testing infrastructure would greatly accelerate this paradigm shift, democratizing EV production beyond metro centers.
Energy accessibility represents another crucial pillar to support the growing EV fleet. The expansion of delivery fleets, gig economy riders, and commercial vehicles has put intense pressure on charging and battery swapping infrastructure. Clear policy guidelines for Battery-as-a-Service solutions covering interoperability, safety, data governance, and seamless digital payments would enable wider adoption. Aligning tax structures to reduce operational costs and fostering a network of charging hubs through viability-gap funding and urban-rural corridor strategies can build a dependable backbone for mobility services that depend on reliability and high vehicle uptime.
Financial inclusion is a powerful driver of EV adoption, especially given the socio-economic profile of many early EV users. Many gig workers, small fleet operators, and delivery personnel lack formal credit history or collateral, resulting in limited access to capital despite their demonstrated repayment ability. Budget 2026 could initiate dedicated credit guarantee programs, reducing lender risk and widening bank outreach to first-time EV buyers. Interest subvention on commercial EV loans would make monthly payments more affordable and adoption more widespread. Additionally, promoting data-driven, usage-based financing models that leverage real-time vehicle utilization could reshape lending models to align with the realities of modern mobility.
Innovation and sustained research deserve focused policy attention to help India leapfrog in the global EV race. Emerging technologies like solid-state batteries, advanced thermal management, lightweight materials, AI-driven predictive maintenance, and cloud-based telematics will define the next generation of EVs. Startups across India are pushing these boundaries, but early-stage research is capital-intensive and often risky. A dedicated National EV Innovation Fund to provide grants and seed capital can create a fertile environment for innovation beyond metropolitan hubs, tapping into engineering colleges and industrial clusters nationwide to cultivate tech leadership and global competitiveness.
Long-term sustainability also requires urgent action, particularly in battery lifecycle management. As EV adoption surges, managing end-of-life batteries becomes critical to avoid environmental harm and resource wastage. Budget 2026 is an opportunity to foster a circular battery economy by incentivizing recycling units, implementing clear Extended Producer Responsibility frameworks, and supporting the establishment of recycling hubs near industrial belts. Early investments in recycling infrastructure will not only mitigate environmental impacts but also create jobs and improve India’s energy security by recovering valuable materials.
This collective vision encapsulates what founders and stakeholders across India’s EV landscape aspire for: an ecosystem where technology, infrastructure, finance, policy, and entrepreneurship harmonize to create a globally competitive industry. Budget 2026 arrives at a pivotal time when the sector is primed for scaling, innovation, and impact. With targeted support from supply chain localization and financing reforms to micro-manufacturing, fuel infrastructure investment, innovation funding, and sustainability initiatives, India can set a new global benchmark for sustainable, decentralized electric mobility. The world is rapidly shifting toward electrification, and India has the talent, ambition, and potential to lead this transformation. What the country needs now is a catalytic budget that matches these aspirations and drives the electric mobility revolution forward at scale.
Bharath Rao is the Co-Founder and CEO of Emobi. Views expressed are the author’s personal.