The Union Budget 2025-26 has been widely welcomed by industry leaders, particularly for its transformative impact on the electric mobility and start-up ecosystems. Key highlights include the exemption of basic customs duty (BCD) on 35 capital goods critical for EV battery manufacturing and tax exemptions on essential materials like lithium and cobalt, significantly lowering production costs and promoting local supply chains.
The budget also emphasised boosting the MSME sector through increased credit access and skill development, alongside measures supporting startups, gig workers and cleantech manufacturing. Investments in infrastructure, public-private partnerships and tax relief for the middle class are expected to stimulate consumer spending and economic growth.
Overall, the budget is seen as a strong step toward making India a global leader in sustainable mobility, innovation and self-reliant manufacturing.
Partner and Automotive Tax Leader at EY India Saurabh Agarwal noted, “The proposed income tax cuts could boost the middle class's spending power, potentially increasing demand for two-wheelers, three-wheelers, and small cars. Further, the government's commitment to fostering a sustainable automotive ecosystem is clearly demonstrated through its strategic initiatives, which are poised to deliver substantial benefits to the EV industry. The budget astutely emphasizes the complete exemption of Basic Customs Duty (BCD) on cobalt powder and waste, scrap of lithium-ion battery, lead, zinc, zirconium, copper, etc. These pivotal measures are designed to ensure a reliable domestic supply of essential critical minerals for manufacturing and to stimulate job creation across India.”
The Central Government has significantly increased budgetary allocations with PME E-Drive receiving INR 40 billion, auto PLI being bolstered by INR 22.18 billion and advanced chemistry cell PLI benefiting from an infusion of INR 1.55 billion. 
Commenting on the newly introduced budget, Mercedes-Benz India Managing Director Santosh Iyer said, “India has long been regarded as a niche garden with high fences; however, this budget is expected not only to enrich the garden by stimulating consumption and strengthening MSME sector, but also lowering the fences through tariff rationalisation and adoption of international practices on transfer pricing, with a clear commitment to enhanced global trade integration. This will send a strong positive signal to the industry, reinforcing confidence in the ‘India Growth Story’, paving the way for sustained investment and future expansion. The announcement of setting up of National Manufacturing Mission’s for clean technology manufacturing and support to domestic EV battery manufacturing is a positive step towards strengthening EV ecosystem. We also welcome the setting up of a high-level committee to evaluate regulatory reforms which will enhance ease of doing business in long term.”
Volkswagen India Brand Director Ashish Gupta, averred, “The Union Budget presents a forward-thinking roadmap for strengthening India’s manufacturing ecosystem with a clear emphasis on clean technology, skill development and infrastructure growth. By prioritizing these areas, along with manufacturing, India is advancing toward a circular economy—where investments, innovation, and sustainable practices drive long-term growth. Infrastructure growth through public-private partnerships and capital expenditure incentives will pave the way for India to become a globally competitive manufacturing hub.” 
Commercial vehicle players have also lauded the budget. Ashok Leyland Executive Chairman Dheeraj Hinduja noted, “The finance minister has presented a clear, growth-driven budget that aligns with the Prime Minister’s vision of fostering a competitive and resilient India with inclusive growth by investing in people, economy and innovation. Additionally, the government's strong commitment to green mobility is expected to create new avenues for innovation and growth across the country.”
Daimler India Commercial Vehicles Managing Director Satyakam Arya iterated, “The Union Budget 2025-26 will be a game changer for India and the mobility sector, helping us become a global leader in EV manufacturing and sustainable transportation. The emphasis on localising battery production will create technological advancements and generate more jobs. Also, with mining identified as one of the six domain areas for transformative reforms and the introduction of the State Mining Index, we see major growth potential for the sector in the coming years.”
EKA Mobility Chairman Sudhir Mehta said, “These different programmes demonstrate a strong commitment to sustainability, innovation and greater industrial competitiveness, setting the framework for transformative progress in a variety of critical sectors. The nation's energy revolution will be dependent on funding for small modular reactors and the government's target of 100 gigawatts of nuclear power by 2047. Long-term growth can be solidified by financial agreements that allow governments to expand their borrowing capacity, as well as indirect taxation initiatives targeted at increasing domestic value creation.” 
Two-wheeler industry
In a move to avoid protectionist signals, the government has reduced import duties on high-end motorcycles. This decision aligns with India's commitment to lowering trade barriers and could influence the premium motorcycle segment.
With electric mobility remaining the focus point of the automotive sector, the budget has made pivotal efforts for bolstering manufacturing. Drawing on that, companies operating in the EV two-wheeler space has welcomed the developments with open arms. 
Kolkata-based Motovolt Mobility Founder Tushar Choudhary said, “"The recent budget has delivered a promising outlook for India’s electric vehicle industry, especially with the reduction in BCD on capital goods related to EV manufacturing. This move will help lower production costs, making EVs more affordable for consumers and encouraging higher sales. Aligned with the National Manufacturing Mission, the budget’s focus on rationalising customs tariffs signals the government's intent to localize high-value production and reduce dependency on imports. Additionally, the exemption on critical minerals like lithium is a significant step toward easing the supply of vital components for EV batteries, further lowering costs and boosting domestic manufacturing. Efforts to localize EV components like batteries, motors and controllers will help reduce upfront costs which would further strengthen India’s EV Ecosystem giving the EV sector the ability to penetrate the Indian markets.”
Chennai-based high performance EV two-wheeler manufacturer Raptee HV’s Co-founder Dinesh Arjun said, “The Finance Minister’s focus on nurturing and investing in innovation is a commendable step toward accelerating new technologies that will shape our future. The allocation of a Deep Tech Fund will further strengthen India’s industrial ecosystem, fostering a globally competitive, tech-driven economy.”
Drawing on the same lines, Revamp Moto Chief Executive Officer Pritesh Mahajan said, “"The National Manufacturing Mission’s support for clean tech manufacturing is a game-changer for India's sustainable future. I firmly believe that this initiative will accelerate the growth of domestic EV battery and solar panel production, reducing our reliance on imports while strengthening India's position as a global leader in green technology. The additional INR 100 billion investment underscores the government’s commitment to fostering innovation, job creation and energy security.”
Welcoming the budget, Odysse Electric Founder Nemin Vora said, “We appreciate the Union Budget 2025, which underscores the government's commitment to fostering economic growth and empowering citizens. The adoption of progressive policies, particularly within the existing tax framework, is a key step in enhancing disposable income and driving consumer spending. This decision will significantly impact consumer-driven sectors, especially the two-wheeler industry. With more disposable income in the hands of consumers—particularly the middle class—purchasing power is set to rise. As a result, more individuals will be encouraged to invest in personal mobility solutions like two-wheelers.”
Associates talk
The boost towards electric mobility is also poised to impact the entire ecosystem. DriveX Founder Narain Karthikeyan noted, “The 2025 Budget is a strong step towards inclusive economic growth, bringing significant benefits across all sections of society. The increase in MSME turnover limits, along with enhanced credit access and intensive skill-development programmes will fuel entrepreneurship, business expansion and youth employment. We also welcome the government’s recognition of the gig economy, with steps to regularise support for gig workers and improve their access to credit facilities. With enhanced credit guarantee cover for MSMEs and startups, particularly in focus sectors crucial for Atmanirbhar Bharat, the budget lays a strong foundation for sustained growth and economic resilience.”
Commenting on the same lines, Taabi Mobility Limited Chief Executive Officer Pali Tripathi said, “The transformation of India Post into a large-scale logistics network, along with greater accessibility to PM Gati Shakti data for the private sector, will significantly enhance connectivity, particularly in hinterland regions. These initiatives will drive smarter freight management, optimise last-mile delivery, and make transportation more seamless and sustainable.”
On the aggregator front Rapido Chief Financial Officer Vivek Krishna said, “The Union Budget 2025-26 has proposed a review of both financial and non-financial sector regulations that are expected to help businesses perform better with lesser compliances. It reflects a bold vision for Viksit Bharat, one that empowers the gig economy, promotes sustainable mobility, and catalyses digital innovation. We welcome the social security scheme and healthcare support announced for gig workers. The e-shram portal registration and the PM Jan Arogya Yojana will be a game-changer in prioritising the well-being of gig workers, including our captains. It’s also encouraging to see the government’s effort in promoting green mobility by incentivising local EV component manufacturing.” 
Alluding to how the manufacturing push will bolster the electric mobility segment, Kinetic Engineering Managing Director Ajinkya Firodia said, “These steps noted in budget will significantly enhance India’s position as a global hub for electric mobility and clean energy technologies. In addition, the focus on expanding charging infrastructure, incentivising electric buses for public transport and ramping up domestic battery production marks a decisive move in India’s EV revolution. The continued subsidies under the FAME scheme will make EVs more affordable and accessible to consumers. This strong policy push not only paves the way for rapid adoption of EVs but will also create jobs, reduce dependence on fossil fuels and position India as a global leader in sustainable transportation.”
Drawing on the same lines, Tata Technologies Managing Director Warren Harris said, “The establishment of five National Centres of Excellence for Skilling is a pivotal move in building a future-ready workforce. This initiative resonates with our commitment to engineering a better future for India's youth through investment in in-demand training programs across Industry 4.0, IoT, and advanced manufacturing and collaborating with state governments to upgrade ITIs into technology hubs.”
TapFin Co-founder Aditya Singh said, “The budget’s emphasis on cleantech manufacturing, including incentives for electric vehicle batteries and the additional 10 GW support for grid-scale batteries, signals a significant shift for India’s electric mobility sector. Strengthening domestic production will foster innovation, reduce dependence on imports, and open new growth opportunities.”

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The Federation of Automobile Dealers Associations (FADA) today released its April 2025 vehicle retail data, revealing a moderate overall growth of 3 percent YoY.

The two-wheeler segment emerged as the primary growth driver, registering a 2.25 percent increase in retail sales compared to April 2024 and a significant 11.84 percent MoM growth. FADA attributes this positive momentum to strong rural demand. However, the sector continues to face headwinds in the form of high financing costs and the pricing impact of OBD-2B emission norms.

The tractor segment demonstrated robust growth, with a 7.5 percent increase in retail sales year-on-year. This strong performance likely reflects the positive sentiment stemming from a strong Rabi harvest, which typically boosts agricultural activity and consequently, tractor demand.

In contrast to the strong performance of two-wheelers and tractors, the passenger vehicle segment experienced a modest 1.55 percent YoY growth, while witnessing a slight dip of 0.19 percent on MoM basis. The auto retail body attributes that deep discounts are prevalent in the market and while the demand for SUVs remains strong, the entry-level segment continues to exhibit sluggishness. FADA also noted that the PV inventory levels are currently around 50 days, significantly higher than their advocated norm of 21 days.

The commercial vehicle segment faced a contraction, with retail sales declining by 1.05 percent YoY and 4.44 percent on MoM basis. FADA suggests that recent price hikes by OEMs and flat freight rates are negatively impacting sales. Within the CV segment, the Small Commercial Vehicle category saw weak demand, while the bus segment remains steady.

Looking ahead to May 2025, FADA anticipates a positive outlook, primarily driven by the strong conclusion of the Rabi harvest. The expectation of a normal monsoon further strengthens this positive sentiment, suggesting continued momentum in rural demand which could positively influence vehicle sales across various segments.

In a significant development, FADA has begun releasing fuel-wise vehicle retail market share data across all key categories. This new initiative aims to provide stakeholders with a granular understanding of evolving energy preferences and the impact of regulatory influences on India's automotive ecosystem.

C S Vigneshwar, President, FADA, said, “The new financial year began on a measured note as overall retails in April managed to grow by 3 percent YoY. All categories except CV closed in the green, with 2W, 3W, PV and Trac up 2.25 percent, 24.5 percent, 1.5 percent and 7.5 percent respectively, while CVs declined by 1 percent. With the tariff war paused, stock markets staged a sharp pullback – alleviating investor concerns – and customers thus leveraged Chaitra Navratri, Akshay Tritiya, Bengali New Year, Baisakhi and Vishu to complete purchases, helping April end on a positive note.”

The President of India, Droupadi Murmu, has posthumously conferred Padma Vibhushan, one of the highest civilian awards, to Late Osamu Suzuki, Former Chairman, Suzuki Motor Corporation and Former Director & Honorary Chairman, Maruti Suzuki India, in a formal conferment ceremony at the Rashtrapati Bhawan in New Delhi on 28 April 2025.

The Padma Vibushan was conferred to Osamu Suzuki for his outstanding contribution in the field of trade and industry. The award was accepted by Toshihiro Suzuki, Representative Director and President, Suzuki Motor Corporation on behalf of his late father.

Toshihiro Suzuki, said, “My sincere gratitude to the Honourable President of India and the Government of India for awarding the prestigious Padma Vibhushan to my father, Osamu Suzuki, Former Chairman, Suzuki Motor Corporation. I have just received this high-level award on his behalf, and I am deeply honoured. I believe he is, from heaven, looking back fondly on the 45 years he spent with India, his second home.”

“This award goes not only to my father, but also to all the people who have worked at Suzuki, Maruti Suzuki and all our business partners, who have supported us in this journey. My father must be feeling very proud today. I am also feeling extremely proud to receive this award. All the employees at Suzuki and Maruti Suzuki and our business partners must be feeling proud of this recognition. This award also expresses thanks to the ‘love of Indian people towards Suzuki’. This award belongs to all of you.”

“We, at Team Suzuki, will carry forward the commitment of Osamu Suzuki with the same passion to bring inclusive and sustainable mobility solutions that will be loved by the people of India,” he added.

Osamu Suzuki played a key role in driving the Indian automotive industry, especially the passenger vehicle segment. Under his leadership, Maruti Suzuki began manufacturing passenger vehicles with around 100,000 units per annum capacity in 1983.

The company is now one of the largest passenger vehicle manufacturers not just in India, but globally.  It was last year that the company reached a cumulative production milestone of 30 million units, an annual production of 2 million units and exporting over 3 million units cumulatively today.

Japanese automotive company Suzuki Motor Corporation, along with Maruti Suzuki India, aims to establish the  Osamu Suzuki Centre of Excellence (OSCOE) in India as part of their tribute to Late Osamu Suzuki, Former Chairman, Suzuki Motor Corporation.

The former chairman was instrumental in bringing Japanese concepts of manufacturing in India, alongside being instrumental in advancing the automotive industry in the country.

The announcement was made as part of the remembrance event held today for Late Suzuki at Yashobhoomi, Delhi Corporation, who passed away on 25 December 2024, in Japan.

The new OSCOE is proposed to be located in Gujarat and Haryana, and will work towards fulfilling the following objectives: 

Support national objective of high manufacturing growth.  

Raise the standard of component manufacturers (including tier-1, 2 & 3) to make supply chains of the country globally competitive.

Build infrastructure and develop programmes in collaboration with academia and others to propagate Japanese manufacturing philosophy. The programme would include, but not limited to formal teaching, lectures, discussions and seminars among others.

It will also focus strengthening the manufacturing landscape beyond just automotive sector.  

For the unversed, Osamu Suzuki played a crucial role in making car ownership accessible to the common man in the country and driving automotive manufacturing, innovation in India. He won many global awards and recognitions such as -

French auto major Renault Group has inaugurated its new Renault Design Centre in Chennai, as part of its new India-centric transformation strategy – renault. rethink.

The new design centre further strengthens the company’s ‘design in India’ and ‘make in India’ strategy. It is also expected to function as a hub of excellence, particularly due to its proximity to Renault Nissan Technology & Business Centre India (RNTBCI).

Laurens van den Acker, Chief Design Officer, Renault Group, said, "India is highly unique and locally driven. Having a dedicated design studio is essential to understanding its nuances, listening to its needs and building from its strengths. The Renault Design Centre Chennai will focus on developing models and concepts tailored to the Indian market while contributing to Renault Group’s global projects. By leveraging local talents and insights, this centre will play a key role in shaping Renault’s future mobility solutions. Its strategic location - at the heart of RNTBCI’s excellence hub - also enables closer collaboration across functions and faster integration of design into our engineering and innovation processes.”

Renault shared that the year 2025 marks an inflection point for the automaker in India, as it gears up to strengthen its presence in the world’s third-largest automobile market.

Venkatram Mamillapalle, Country CEO and Managing Director, Renault India Operations, said, "The launch of the 'renault. rethink' strategy heralds a new era for Renault in India. We are proud to be the most Indian of European carmakers, boasting the largest R&D centre, manufacturing unit, highly localised supply chain and now one of the largest design centres. The opening of new design centre in Chennai will play a crucial role in the deployment of the Renault International Game Plan 2027. Our commitment is to redefine our brand, product positioning, and customer experience to meet the evolving needs of our customers in the country, hence we recently witnessed the global debut of new ‘R store’ in Chennai, India."

It has renewed its commitment for India with a 90 percent localisation target, and the recent takeover of the alliance’s manufacturing plant RNAIPL.

In 2024, Renault Group clocked a record EUR 4.3 billion in profit, which is 7.6 percent of its revenue, and saw its revenue grow to EUR 56.2 billion, up 7.4 percent YoY.

Design & Engineering in India

At present, Renault Group’s Chennai R&D centre is one of its largest globally, with around 10,000 engineering working on global and local projects. Now, the Renault Design Centre Chennai extends over 1,500 metre and is equipped with the latest technologies. It features a high-tech environment designed for 3D model evaluation and virtual reality experiences, a next-generation visualisation studio, a creative collaboration zone, high-performance LED wall, advanced VR integration and a harmonious blend of European and Indian Design.

“renault. rethink is more than a sculpture – it’s a bold expression of Renault’s vision for India. It symbolises our commitment to innovation and to designing cars in India, for India. This artwork captures the energy of a nation in motion, a future taking shape, and Renault’s ambition to be part of this exciting journey,” stated Acker.