India is exhibiting its dedication towards a cleaner and greener nation and its responsibility towards zero emissions across the globe in all forms of its actions. From providing incentives to electric vehicle manufacturers and buyers to developing infrastructure across the country, converting parts of public transportation to electric, and putting a primary focus on the electric vehicle industry when making budget decisions, the industry has been growing noticeably in the past two years and making an impact both in the industry and the environment. The incentives and budget considerations are catalysts for this major transformation and cause.

There are a few regimes in our new budget that boosts the future and growth of EVs. These are implemented as part of all the policies which are introduced in the past like FAME. Here are the major points where the difference will be visible by these incentives.

  • 35000 cr for energy transition investment

In order to minimize carbon intensity and the usage of fossil fuels, Sitharaman also pledged an additional Rs 19,700 crore for the government’s Green Hydrogen Mission. She also declared a five-million-ton goal for the creation of green hydrogen by 2030. The National Green Hydrogen Mission, with an initial investment of Rs 19,744 crore, was approved by the government on January 4, 2023, with the goal of making India an energy-independent country and decarbonizing important sectors. She added that a green credit program would also be announced under the Environmental Protection Act and that the Center is also supporting the installation of 4,000 MWh of battery energy storage.

  • Li-ion battery customs duty reduces by 13% from 18% to 5%-

The government today eliminated customs duties on the import of capital goods and machinery used in the fabrication of lithium-ion cells in an effort to promote domestic production of lithium-ion cells for batteries used in electric vehicles (EVs). Industry analysts claim that machinery and capital goods needed for the production of lithium-ion batteries are subject to customs duties ranging from 5% to 20%. It won’t change until March 31, 2024. Input costs will decrease as a result of the basic customs duty reduction, which is also anticipated to improve value addition, support export competitiveness, and stimulate domestic manufacturing.

  • Suggestions from major players in the market
  • FAME II subsidies extension
  • Reduction in GST on EVs
  • PLI scheme benefits
  • Relaxation on FDI norms.
  • Exemption of import duties on capital goods and machinery required to produce Li-ion batteries for EVs-

This initiative will reduce the burden on manufacturers who are importing machinery or technology from other nations. This encourages more enthusiasts for entering the market and increases FDI in the country. Along with the industry, we can observe a vast growth in employment as industries provide opportunities for many in this young nation.

  • Reduction in the tax for raw materials required for manufacturing nickel cathode-

As the cathode is a crucial element in the cell, reducing or reducing the tax on raw materials for manufacturing the cathode will have the same benefit as it has on Li-ion and machinery tax exemptions.

The central government has been adopting practical efforts that are assisting the country in following the road with the main goal of having no carbon emissions by the year 2070. The vision also includes the fiscal strategy and the exemptions. In addition to manufacturers, the federal government also supports consumers.

The government wants to import high-quality goods from domestic producers that can compete in both domestic and international markets. Many other countries are investing in India and growing the EV market and industry thanks to the rules and incentives. On the other hand, the government and numerous business organizations are collaborating to build the infrastructure and technology for charging stations, which is the main issue among EV users and consumers. The environment and roads will soon be greener and cleaner throughout the nation.