How are Auto Industry Players Reacting to Union Budget 2025?

Finance Minister Nirmala Sitharaman , at the Parliament, has announced major tax reductions on the basic customs duties for EV batteries. During her speech for the Union Budget 2025, she stated that the list of exempted capital goods will now have 35 additional goods required for the battery manufacturing of electric vehicles.

Can the prices of electric vehicles be dropped?

As FM Nirmala Sitharaman stated the exemption of the BCDs, results in lower production costs of electric vehicle batteries aiming to boost domestic manufacturing. It might bring down the upfront cost of the EVs.

Here’s a rundown of the industry experts on this exemption in the manufacturing of EV batteries:

“By extending customs duty exemptions on key capital goods for EV batteries and integrating EV production with Clean Tech manufacturing, India is laying the groundwork to become a global leader in the electrification revolution.” Rajiv Rawat, Asia Pacific Head of B2B Operations at a leading auto company, said in an exclusive interaction with Republic Auto. “This move will not only slash production costs for OEMs and component manufacturers but also create a seamless and robust domestic supply chain for critical EV components— motors, controllers, and batteries—positioning India as a competitive powerhouse in the global EV race.”

Also Read: Union Budget 2025: FM Announces exemption on EV battery manufacturing, Prices May Drop

Reacting to the budget, Anshul Gupta, Managing Director, OPG Mobility said, “The Government’s emphasis on domestic battery manufacturing and EV component production further strengthens our resolve to redefine the future of mobility with premium yet affordable electric two and three-wheelers.”

Responding to the budget 2025, Mr Narayan Subramaniam, CEO & Head of Design, Ultraviolette Automotive, “The inclusion of 35 capital goods for EV battery manufacturing in the exemption list is a transformative move, significantly reducing production costs and fostering innovation in lithium-ion battery production.”

Further commenting on the budget, “The rationalisation of custom duties on key raw materials and the reduction of inverted duty structures will also enhance cost-effectiveness in domestic manufacturing. The duty exemption on capital goods for EV battery manufacturing is a welcome step toward accelerating India's electric mobility transition.” Mr Vinod Aggarwal, MD & CEO VECV, said.