Budget 2023-24: Pre-Budget Expectation Quotes From EV Industry Experts


Finance Minister Nirmala Sitharaman will present the Union Budget 2023-24 in Parliament on February 1, 2023. The EV industry has high expectations from the financial budget this year.

Here’s what our industry experts have to say:

The Indian government has been promoting the use of EVs in the country to reduce the carbon footprint and to make the country self-reliant in terms of energy. That’s common knowledge, but what is interesting is that through previous budgets, the government has announced various measures such as reducing GST rates on EVs, providing subsidies for their purchase, and promoting the use of charging infrastructure.

In Budget 2023, it is expected that the government will announce further measures to support the growth of the EV industry. This may include tax incentives for manufacturers, subsidies for charging infrastructure, and financial support for research and development of new technology. The government may also encourage to increase in the use of EVs in government vehicles, which would be a significant boost for the industry.

Additionally, the government may announce additional measures to promote the use of locally manufactured EVs to make India self-reliant in terms of energy.

In conclusion, the expectation for the EV industry in Budget 2023 of India is high and it is hoped that the government will announce measures that will help the industry to grow and reach its full potential.

Dr. Irfan Khan, Founder & CEO of eBikeGo

Currently, Li-Ion batteries attract a GST of 18%, whereas the overall cost of an electric vehicle in India attracts a GST of 5%. The government should re-look its tax and tariff policies on not only EVs but also related component requirements for the e-mobility ecosystem. This will help the EV battery-swapping ecosystem, which is going to be the key for the shared and micro-mobility sector in the country. It is also important for import duties on Li-Ion cells to be reduced until cell manufacturing in India takes off in a big way. Battery swapping reduces upfront costs and downtime and allows EV owners to swap out discharged batteries for charged ones at various swapping stations, resulting in faster adoption of EVs in the Indian market.

Also, the current PLI scheme is not designed for MSMEs and is more favourable for larger corporations. It is important to bring start-ups and MSMEs into the framework.

Harsha Bavirisetty, Co-Founder of Biliti Electric

Being a startup, which is about to hit the market with an innovative Electric and Self-driving Tractor, we have been through the details of the financials of manufacturing a product and then selling the products. Agriculture being the backbone of the country, we believe electric tractors which are much more efficient than diesel tractors can positively impact farming in the country. While working on the manufacturing plan and the feasibility of selling Electric tractors, we have come across a few pointers that could help companies like ours to introduce these products in the market with more ease and with which the acceptability of the products will also increase.

1) The government should realize that there is no other feasible option for EV manufacturers to truly source lithium cells apart from importing the same. When the cells are imported the custom duty that is levied on the cells needs to be reduced to make it feasible for manufacturers to price the EVs

2) The Tax that is levied on components that are used in an EV or used to make parts of EV vehicles such as the motor, controller, connectors, and electronics components needs to be reduced as the cash-in-hand situation for the OEM becomes very tight when we end up paying more taxes than what we get in return. The gap that is refunded takes more time to get refunded or is not refunded correctly in most of cases which needs to be looked into to avoid cash-trapped situations for EV manufacturers.

3) It is an age of Electronics and the development that countries are doing on the critical components like sensors needs to be taken very seriously, India must focus on developing the core components within the country and try to be self-reliant in the same, so the financial support required for manufacturing these critical components should be more than anything else as it is the next “oil” for the world.

4) Instead of providing subsidy on private vehicles the focus should completely shift on providing subsidy and buying benefit to commercial and public transport vehicles as these are directly going to impact the overall economy of the country and solve multiple problems of traffic congestion and air and noise pollution in cities as people start preferring public transport which is an EV rather than buying personal vehicles.

5) The subsidy and buying benefit provided to commercial EVs will help get critical tasks such as transportation, agriculture activities, and construction done in much more efficient manner which ultimately will reduce the cost of goods and real estate. These are a few pointers that we could share for the budget expectations. We are surely looking forward to a very good budget this time as this year a lot has changed after Covid got in control and most businesses became leaner than what they were before Covid. The budget will surely be a game changer as the whole world right now is looking at India with hope and admiration for the way it is growing year on year both economically and politically.

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Kaustubh Dhonde, Founder & CEO of AutoNxt Automation

As the country looks towards Budget 2023, we trust that the electric vehicle sector has the potential to play a major role in driving economic growth and development. We are expecting the policy makers to take steps to make EVs more affordable and accessible to the public, such as by lowering GST rates on EV spare parts and reducing input GST on EV OEMs. We also hope that the government will continue to extend support for the development of the EV sector. We believe that these measures will help to drive the widespread adoption of this clean and sustainable mode of transportation.

Mr. Anshul Gupta, Managing Director, Okaya electric vehicles

“2022 has seen a rise in EV sales, especially EV two-wheelers, which has seen a whopping rise of 300% compared to the year 2021. This shows the promise of the EV market in India; not only will it grow if it gets the right push, but India also has the potential to be a global pioneer in the EV sector. The key focus of the EV industry should now be on building scale and capacity. The urgent need of the hour is to drive Reliability, Interoperability, and Economies of Scale across all parts of the EV ecosystem. Some sectors that need support and push from the Government are the Batteries (both hardware and software), OEM, and Charging Infrastructure. The Budget should focus on ease of business and encourage more local players to enter the market. Areas like component Localization, access to components, etc, if addressed, then the Indian companies, big or small, can build competitive products at competitive prices. In 2000 India became a software hub. Maybe in the 2020s, India can become the EV hub of the world.

Arjun Sinha Roy, Co-Founder, iRasus Technologies

A huge part of the Initial adoption of most Electric Vehicles is being done through the leasing/ renting model. A lot of interesting business models have evolved in the last few years. While govt is providing subsidies to push EV adoption there still is a huge need to relook at the GST being charged currently in the EV sector. This includes GST on leasing/renting to individuals as well as corporates. Also, GST needs a major revamp when it comes to Charging As A Service, Energy As A Service & Vehicle As A Service models both for the fixed battery as well as Swap battery services.

Furthermore, companies with EV fleets need to be incentivised as they lead this change despite higher Capital costs of EVs & a need to set up captive charging infra as of now. EV taxis should be completely exempted from GST at least for the next few years till a critical mass is reached.

Girish Nagpal, CEO & Co-Founder, MetroRide

While the world continues to see the gaining importance for bicycles as a sector, with Europe holding more than 50% of the total global e-cycle market. Increasingly, Indians are beginning to understand the value proposition of cycles and e-cycles and are willing to switch from their existing modes of commute. This is a positive sign for the sector given that around 20 Mn bicycles are made and sold in the country.

With the upcoming Union Budget 2023-24, we are hoping for the inclusion of cycles and e-cycles in the existing schemes and policies such as PLI and FAME-II, that would help transform the bicycle industry in the country. There is huge potential within India for the cycling industry and by taking adequate measures such as providing subsidies and lowering interest rates on the purchase of an e-cycle would help in increasing adoption, contributing to the socio-economic needs of the consumer. As a nation, we are already one of the largest push-cycle makers in the world, having the capacity, talent, and intention to exponentially increase manufacturing, by making globally competitive and technologically advanced e-cycles. With severe supply chain disruptions globally; this is our opportunity to take the pole position in supplying e-cycles to the world.

Mr. Aditya Munjal, Director, Hero Cycles

The Union Budget 2023-24 comes at a time of inflection. India and the world, in general, are trying to reinvigorate its economy post Covid and the EV ecosystem is at the cusp of disproportionate growth. India needs the right set of fiscal support to accelerate its recovery. An integrated and clean logistics ecosystem has to be a key component of the  Government’s vision of a $5 trillion economy.

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We expect the budget to extend the Corporate Tax Benefits for Infrastructure companies and reduce the GST from 18% to 12% for the Logistics sector. This GST reduction will go a long way in managing the inverted GST impact ailing the EV logistics sector.

Another key aspect is making finance easy for EVs. This can be done by loan mandate to Govt sector banks and financial institutions. The government can see this as a kickstart to a sustainable economy while driving demand for the automotive industry.

Mr. Maxson Lewis, Founder, and Managing Director, Magenta Mobility

The future of any industry with high growth potential is heavily influenced by public policy. Given the accelerated EV adoption in India and OEMs expanding their product offerings, the industry needs a long-term policy that is balanced, consistent, and forward-thinking. This is critical for breakthrough innovations with cutting-edge technology that require investment in terms of resources and time over extended periods.

By 2030, we expect about 45% EV adoption in India’s two-wheeler segment. The percentage of high-powered motorcycles is also expected to increase severalfold. We are already seeing the positive impact of PLI and FAME II in the adoption of EV two-wheelers, even against various macroeconomic headwinds. These incentives and support are also needed for advanced technologies, which will unlock the potential of homegrown innovators and cutting-edge R&D that can make India a global EV leader.

Mr. Narayan Subramaniam, Co-Founder, and CEO, of Ultraviolette

Even when EV sales have doubled in the last year, the industry still suffers from higher initial ownership costs of EVs, which is a direct result of higher input costs. We hope the upcoming budget will reduce GST on raw materials/components, thereby accelerating India’s EV race. Because battery manufacturing in India relies heavily on imports, some duty relief could help reduce overall costs. EVs have fewer financing options and higher interest rates than ICE vehicles. The EV industry is hoping for a positive outcome from the government’s meeting with the World Bank. Aside from the PLI expansion, other state government programs such as GEDA and central government initiatives such as “Atmanirbhar Bharat” would undoubtedly benefit.

Mr. Rahul Jain, Director – Crayon Motors

Climate change is the biggest challenge of our time and with its devastating effects on ecosystems and communities, it is critical that the upcoming Union Budget allocates adequate resources to tackle it. The last budget was promising for the EV sector and discussed a new battery-swapping policy. A higher allocation was also made to the Union Ministry of Environment, Forests, and Climate Change. However, as the world’s third largest emitter of greenhouse gasses, we are still far from achieving our ambitious goals of net zero carbon emissions by 2070. The need of the hour is to broaden the focus. More funds need to be allocated towards developing climate technology designed to reduce emissions, improve energy efficiency and create more sustainable pathways for development. A greater focus needs to be laid on renewable sources of energy such as solar power and wind energy, energy efficiency measures, smart grids, and boosting the electric vehicle’s ecosystem.  Companies and startups operating in the sector must be given benefits like PLIs, subsidies, and lower GST on the import of raw materials or equipment, etc. Investors and startup incubators backing such players should be provided tax exemptions and other capital gain benefits. By prioritizing climate tech incentives in the upcoming Union budget, India can lead the way toward a greener future for all citizens.

Mr. Varun Goenka, CEO & Co- Founder, Chargeup

  • Streamline the PLI scheme, thus bringing clarity in the provisions and related benefits  
  • FAME II scheme to be defined with more clarity and inclusive to ensure innovation in product development and enhance EV adoption
  • Level playing field between established players and start-ups in the segment
  • The applicable GST levied needs to be reformed and rationalised – anticipating a curtailment in the current GST on lithium-ion battery packs and cells from 18% to 5%. 
  • Further, boost in the charging infrastructure development – PPP model could be looked at more comprehensively for rapid deployment
  • Promote the universal battery charging and swapping infrastructure for ease of use

Mr. Ketan Mehta, Founder & CEO, HOP Electric Mobility

The government has been supportive of the EV industries with the constant policy push in the last few years. As the ambit of EVs expands, we hope that the upcoming Union Budget considers increasing the FAME-II subsidy for the e-auto (L5M) segment to Rs. 15000 per kWh or 40% of the ex-showroom cost, whichever is lower in line with EV two-wheelers. The e-auto segment has undergone rapid electrification transformation and will prove to be a major source of enhancing last- mile connectivity. This will lead to improving affordability and accelerate EV adoption further in the country.

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Mr. Hyder Khan, CEO Godawari Electric Motors

Delta firmly believes that the Union Budget 2023–24, which will be unveiled at a pivotal time of geopolitical unpredictability, high inflation, and sluggish global economic growth, will aid the EV industry in moving forward and accelerating the adoption of EVs.

E-mobility will advance in India as a result of newly announced government measures to improve the infrastructure for charging. Grid connectivity will be improved, and installing infrastructure for public charging will be made simpler. However, the part needs a bigger push. The industry needs more assistance to encourage private enterprises to build charging infrastructure, which will facilitate the widespread adoption of EVs.

Infrastructure for charging requires capital-intensive design and installation costs. The sector’s top aim is to keep capital costs as low as feasible. The proper course of action for making it easier to install charging infrastructure is to facilitate grid connectivity, but it is crucial for the sector that the government also subsidizes electrical connections and fixed load fees for EV charging point operators.

The government has encouraged the use of charging stations by setting the GST at 5% on the sale of charging stations, but the GST rate is 18% when using the infrastructure. Given that many people utilize these charging stations and do not qualify for an input tax credit, the government must reduce this GST to 0%, just like it does with the sale of energy.

Making low-cost renewable energy available: The transition from expensive fossil fuel-based power generation to affordable renewable energy will aid in making EV transportation really viable. By supporting strategies like open access to solar energy, it will be possible to increase the supply of RE electricity while lowering operational costs.

Revenue generation: Installing EV charging infrastructure requires significant investment. The industry can be made more profitable in a number of ways, including by enhancing promotion, introducing smart charging services, and investigating network interoperability to lower latency, increase revenues, and lower expenses.

Make charging stations a part of green building: India is putting an emphasis on smart cities and green construction. The proper charging infrastructure is crucial for both new green real estate projects and existing real estate including industrial, commercial, and residential complexes. This will promote sectoral growth and open up opportunities for the industry to generate income.

Mr. Amit Gupta, Head- Energy Infrastructure Solutions, Delta Electronics India

In recent years, electric vehicles (EVs) have become increasingly popular in India owing to growing eco-consciousness, efforts to reduce dependence on fossil fuels, and rising fuel costs. The Union budget 2023 is expected to be a turning point for the sector. The EV industry is expecting a GST cut from 18% to 5% on lithium-ion battery packs and cells. The Indian electric vehicle (EV) sector, which mainly relies on batteries, would benefit if this transformation were to occur.

Furthermore, to boost the manufacturing and adoption of EVs the sector is counting on the government to promote carbon credits by enacting regulations that encourage businesses to cut their carbon emissions. Firms that emit less than the government-imposed limit can trade or sell the extra credits to companies that must satisfy the limit under a cap-and-trade system. As a result, companies receive financial rewards for spending money on sustainable energy technology and lowering their carbon footprints. Furthermore, the FAME II Subsidy Program has been effective in encouraging EV adoption in India and it’s expected to be extended beyond March 2024. Also, it is expected that the government will implement a PLI scheme for battery pack manufacturers as a means of supporting the EV market and making electric vehicles more affordable and accessible to customers. This will ensure that sufficient capacity will be available to meet the anticipated demand for electric vehicle batteries.

Mr. Pratik Kamdar, Co-Founder Neuron Energy

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