India’s electric mobility and auto component industry has broadly welcomed the Union Budget 2026–27, calling it a timely policy push towards strengthening domestic manufacturing, accelerating clean mobility adoption and building resilience across critical supply chains.
With measures spanning MSME support, export competitiveness, localisation of EV components, battery manufacturing incentives and recycling of strategic minerals, industry leaders believe the Budget provides a strong foundation for India’s next phase of electric mobility growth.
The Automotive Component Manufacturers Association of India (ACMA) described the Budget as pragmatic and forward-looking, noting that the continued focus on manufacturing and MSMEs — including steps to improve access to credit, promote scale and enhance productivity — will support capacity expansion and sustained investments in technology.
“The Union Budget 2026–27 lays a clear and credible roadmap for strengthening India’s manufacturing ecosystem. The sustained focus on MSMEs, clean mobility, and export facilitation will help the auto component industry navigate global headwinds while positioning India as a competitive and trusted manufacturing and sourcing destination,” said Vikrampati Singhania, President, ACMA.
Beyond the broader component industry, companies operating deeper in the EV supply chain see the Budget’s emphasis on advanced electronics, rare-earth supply security and localisation as critical enablers for self-reliant electric mobility manufacturing.
Vijay Thakur, Co-Founder and CEO of Tsuyo Manufacturing, said the push for advanced electronics and EV component support will significantly benefit domestic electric motor manufacturing across two-wheelers, three-wheelers and commercial EVs.
“We also appreciate the REPM scheme’s emphasis on critical mineral recycling, reinforcing a circular economy and enhancing sustainability across the e-mobility value chain. Overall, the Budget provides a strong foundation for self-reliant electric mobility growth,” Thakur said.
Industry executives also pointed to the Budget’s MSME measures and capital expenditure focus as important for strengthening the auto component supply chain, especially as demand for EVs expands.
Deepak Jain, Chairman of Lumax Group, said the Budget provides macroeconomic stability through its emphasis on capex and targeted support for smaller enterprises. He highlighted the ₹4,000 crore enhancement to the Self Reliant India Fund and the government’s focus on creating “Champion MSMEs” as particularly encouraging.
Jain also noted that targeted duty exemptions on capital goods for lithium-ion cells used in battery storage signal the government’s intent to strengthen India’s clean mobility and advanced manufacturing ecosystem, while adding that the industry will look forward to greater clarity on customs duty rationalisation.
For Tier-1 suppliers, the Budget’s focus on electronics and semiconductors is being viewed as a decisive step in building domestic EV value chains.
Ravi Mehra, Managing Director of Uno Minda, highlighted the ₹40,000 crore outlay under the Electronics Components Manufacturing Scheme and the launch of India Semiconductor Mission 2.0 as significant measures that will strengthen domestic supply chains and support the auto components sector.
He also welcomed proposals such as dedicated rare-earth corridors and exemptions for capital goods linked to EV battery manufacturing, which could meaningfully reduce import dependence and boost lithium-ion battery production.
Battery and energy storage players also see the Budget as reinforcing confidence for manufacturers investing in future-ready technologies.
Jayadev Galla, Chairman and Managing Director of Amara Raja Energy & Mobility, said the sustained focus on infrastructure — especially logistics, freight corridors and inland waterways — is critical for manufacturers as it lowers transportation costs and improves supply chain reliability.
“We welcome the focused support for domestic lithium-ion cell manufacturing, energy storage, and critical minerals, which are essential for reducing import dependence,” Galla said, adding that the Budget positions India well to emerge as a global hub for sustainable and advanced manufacturing.
A key structural theme emerging from the Budget is the growing emphasis on recycling and secondary materials, which industry stakeholders say will be vital for long-term mineral security and circularity in the battery ecosystem.
Gaurav Dolwani, Founder and CEO of LICO Materials, welcomed the full customs duty exemption on waste and scrap of lithium-ion batteries and critical minerals, calling it a step that addresses long-standing challenges around feedstock availability.
“For recyclers, consistent access to raw material is what enables scale, investment, and better recovery outcomes,” Dolwani said, adding that these measures strengthen the Make in India agenda by enabling a more circular battery supply chain.
Overall, the EV and auto components industry views Budget 2026–27 as a decisive push towards localisation, sustainability and global competitiveness. With stronger domestic value chains spanning electronics, batteries, rare-earth materials and recycling, stakeholders believe India is moving closer to becoming a self-reliant electric mobility powerhouse.
As the industry awaits further clarity in detailed Budget documents, the focus will remain on effective implementation to accelerate India’s clean mobility transformation and strengthen the country’s position in global EV supply chains.
