Budget 2026 expectation: Automakers and industry leaders have called for rationalisation of duties on electric vehicles (EVs) and components, along with
stronger policy support for localising EV technology, in the upcoming Union Budget to sustain growth in India’s automotive sector.
Finance Minister Nirmala Sitharaman is set to present the Union Budget for the 2026–27 financial year on February 1.
Skoda Auto Volkswagen India MD and CEO Piyush Arora said policy continuity, infrastructure development and a robust EV ecosystem will be critical to maintaining momentum in the industry. “...If there are some important duties in the electric (vehicle) space that can be addressed (in the Budget) going forward, it would help… Continuity is extremely important for our sector, along with further focus on infrastructure growth and building up the EV ecosystem,” Arora told Press Trust of India (PTI).
Industry executives from Toyota, JSW MG Motor and JK Tyre also echoed similar expectations from the Budget, to be presented next week.
Duty rationalisation on EVs and components
Arora highlighted the importance of customs reforms to help multinational companies manage exports and imports more efficiently, while facilitating the introduction of global technologies in India.
On electric mobility, JSW MG Motor India MD Anurag Mehrotra said rationalisation of duties on EV components would be a “welcome move,” adding that it would help accelerate adoption and manufacturing. “On the electric mobility front, we expect the government to further strengthen consumer-led incentives and schemes to accelerate EV adoption,” he told PTI.
Localisation of EV technology and manufacturing
Automakers are also seeking greater policy support for localising EV technology and manufacturing. Arora said Skoda Auto Volkswagen’s strategy remains “local for local,” with products developed in India for domestic and export markets. “From the very beginning, we have engaged engineering skill sets and supplier communities in India,” he said, citing exports of India-developed cars to Vietnam as an example.
Toyota Kirloskar Motor Executive Vice President Vikram Gulati said the Budget should prioritise manufacturing localisation and workforce skill development in line with rapid technological changes, according to a statement to PTI.
Policy continuity and regulatory roadmap
Arora said regulatory clarity and consistency across technologies would help the industry plan investments, noting delays in final notification of the latest Corporate Average Fuel Economy (CAFE) norms. A clear roadmap, he said, would support long-term product planning and compliance.
JK Tyre & Industries Chairman and Managing Director Raghupati Singhania also stressed policy continuity, saying it would help sustain demand and create multiplier effects across the economy.
Charging infrastructure and consumer incentives
Mehrotra said that while India’s charging network has expanded, “there is still considerable progress to be made,” and called for fiscal support to accelerate infrastructure deployment. He added that continued consumer incentives would be important to boost EV adoption.
Arora noted that price parity with alternative fuel vehicles, charging infrastructure and range anxiety will determine the pace of EV adoption in India.
Support for multiple green mobility pathways
Industry leaders urged the government to continue supporting multiple green energy pathways, including hybrids and alternative fuels, to meet energy security and net-zero targets.
Toyota said sustained infrastructure development and green mobility support will be key to India’s long-term sustainability goals.
Trade agreements and global integration
Arora said bilateral trade agreements, including the India–EU free trade agreement, could help bring products and technologies to India faster and at competitive prices. “We have always been proponents of bilateral trade agreements… it will give us an opportunity as a group,” he said.
Singhania added that policy measures supporting exports and integration into global supply chains would be increasingly important amid evolving global trade challenges.
Market outlook and electrification plans
Arora said the passenger vehicle market is expected to grow 5–6 per cent in 2026, with Skoda Auto Volkswagen aiming to increase market share through new product launches. Electrification remains a focus area, with the group exploring potential electric vehicle introductions in India.
(With Inputs from PTI)
