The Budget 2025-26 is expected to focus on sustainability, technological innovation, and employment generation. Policymakers are likely to allocate funds towards boosting EV manufacturing through various schemes, including Auto PLI, PM E-DRIVE, and the Scheme to Promote Manufacturing of Electric Passenger Cars (SMEC). These measures aim to attract both domestic and international investment, reinforcing India’s position as a leading hub for automotive production and green mobility.

India’s automotive industry has undergone a remarkable transformation, emerging as the world’s third-largest market. This evolution is driven by changing consumer preferences, rising demand for sustainable mobility, and progressive government policies. With various initiatives fostering industry growth, India is positioning itself as a major global player in automobile manufacturing.

Government Initiatives Powering Growth

The Indian government has introduced several forward-thinking policies to propel the sector’s expansion. Programs like the Production Linked Incentive (PLI) for automobiles, Faster Adoption and Manufacturing of Electric Vehicles (FAME-II), and the PM E-DRIVE and SMEC schemes have significantly contributed to this upward trajectory. The PLI scheme alone has attracted investments worth ₹20,715 crore, leading to incremental sales of ₹10,472 crore—a major boost for the industry.

PM E-DRIVE: Electrifying Public Transport

A key component of India’s green mobility push, the PM E-DRIVE Scheme is dedicated to enhancing the electric vehicle (EV) ecosystem. This initiative prioritises the electrification of public transport and the expansion of EV infrastructure across the country. So far, the scheme has disbursed ₹332 crore, playing a vital role in India's sustainable transportation strategy. With a clear commitment to fostering innovation and sustainability, Budget 2025 is set to pave the way for an even more dynamic and eco-conscious automotive sector in India.