OEMs Applaud Budget 2025's Infrastructure and EV Push

Key Highlights:

• Union Budget 2025 allocates Rs 11.2 trillion for capital expenditure, up by 10.1%.
• Focus on infrastructure development, especially in transportation and urban sectors.
• Reduced customs duties on battery materials to support the EV sector.
• Launch of the National Manufacturing Mission to strengthen key sectors.
• Simplified duties and taxes to support MSMEs, startups, and innovation.

The Union Budget 2025, announced on Saturday, has allocated Rs 11.2 trillion (Rs 11.2 lakh crore) for capital expenditure in FY2026. This shows a growth of 10.1% from the previous year's allocation of Rs 10.2 trillion (Rs 10.2 lakh crore). Industry experts believe that this strong focus on infrastructure and fiscal consolidation will be beneficial for the economy.

Infrastructure's Role in Economic Growth

Infrastructure—such as roads, highways, railways, and urban development—is vital for economic growth. It improves connectivity, reduces logistics costs, and promotes industrial activity, driving demand for automobiles, construction equipment, and other products.

Focus on Infrastructure

Ashish Modani, Senior Vice President & Group Head of ICRA Limited, highlighted that the Union Budget 2025 focuses on boosting the infrastructure sector, with significant investments in transportation and urban development. He stated that, "successful execution of these projects will be key to achieving the desired results and ensuring steady economic growth in the years ahead.

Green Mobility and National Manufacturing Mission

Dheeraj Hinduja, Executive Chairman of Ashok Leyland, stated, "The budget focuses on nationwide infrastructure development and speeds up the digital economy. Ongoing government investments in infrastructure will drive long-term economic growth. The government's strong push for green mobility is also expected to open up new opportunities for innovation and growth throughout the country." 

Roadmap for India's Long-Term Growth

Girish Wagh, Executive Director of Tata Motors, said the budget offers a roadmap for India’s transformation with a focus on modernization and inclusive development. The allocation of over Rs 11 lakh crore for capital expenditure, along with initiatives to boost consumption and support ‘Make in India,’ will create a dynamic economic environment.

Boost for Electric Vehicles

The budget also removes customs duties on materials for battery manufacturing, which will help to boost the domestic EV production. 

Support for MSMEs and Commercial Vehicles

Vinod Aggarwal, MD & CEO of VECV, welcomed the emphasis on Clean Tech Manufacturing and the reduction of customs duties, which will improve the cost-effectiveness of domestic manufacturing. The budget's focus on infrastructure development, particularly in transportation, will also increase demand for commercial vehicles.

Focus on MSMEs and Startups

Mahesh Babu, CEO of SWITCH Mobility, noted that the budget’s focus on income tax cuts and exemptions for those earning up to Rs 12 lakh will boost consumer spending. This will benefit sectors like commercial vehicles, which are seeing higher logistics demand. Additionally, the simplified duties and taxes will support MSMEs and startups.

Support for Electric Vehicle Ecosystem

Sandeep Singh, MD of Tata Hitachi, called the budget "overall good," highlighting the increased focus on infrastructure, capital expenditure, urban development, and the Jal Jeevan Yojana, which he sees as positive for the construction equipment sector.

Yatin Gupte, Chairman & MD of Wardwizard Innovations & Mobility Ltd, welcomed the Union Budget 2025-26 for its strong push towards electric vehicle adoption. He noted that the reduction in customs duties on lithium and other key materials will lower battery manufacturing costs, making EVs more affordable and boosting domestic production.

Also Read: Mahindra Truck and Bus Division (MTBD) Expands with 87th Dealership in Lakhimpur, Assam

CMV360 Says

The Union Budget 2025 balances economic growth and sustainability well. With a strong focus on capital expenditure and infrastructure development, it aims to modernize India’s economy and improve connectivity. The emphasis on clean mobility and reductions in customs duties for battery materials will help make electric vehicles more affordable, driving India’s green transition. The support for MSMEs and simplified duties will encourage entrepreneurship and innovation.