Budget Expectation: Electric Vehicle Sector Demands Hike in Subsidy, GST Reduction

As the Union Budget approaches, India’s electric vehicle (EV) industry is advocating for substantial support to enhance the sector’s growth and sustainability. Key demands include increased subsidies, reduced GST on EV components, supportive policies for research and development, and the introduction of production-linked incentives (PLI).

Key Points:

• Subsidy Increase: Industry stakeholders are urging the government to increase subsidies to make EVs more affordable and accessible.
• GST Reduction: A reduction in GST rates on EV components and batteries from the current 18% to 5% is expected to help offset potential price increases and boost adoption.
• Long-term Policy Framework: With the Electric Mobility Promotion Scheme (EMPS-2024) ending on July 31, manufacturers are calling for a robust, long-term scheme to address the evolving needs of the EV ecosystem.
• Production-Linked Incentive Scheme: Introduction of PLI schemes specifically for EV charging companies is seen as crucial to expanding infrastructure and promoting widespread EV adoption.
• Tax Reforms: The industry also seeks tax reforms to support EV manufacturing and encourage consumers to opt for electric vehicles.

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