Auto industry reacts to Budget 2024: Who said what

The Indian automobile industry largely reacted positively to the announcements made as part of the Union Budget 2024 in Parliament by Finance Minister Nirmala Sitharaman on Tuesday. During the course of the Budget 2024-25 presentation, Sitharaman stressed on the central government's key priority areas which include employment and skilling, manufacturing and services, infrastructure development and inclusive human resource development. And although she also proposed nearly halving the allocation for FAME II from FY24 Budget estimate of ₹5,172 crore to ₹2,671 crore for FY25, the overall Budget 2024-25 seems to have received a thumbs up from the automotive sector in the country.

Union Finance Minister Nirmala Sitharaman showcases a red pouch carrying the Budget documents, outside the Finance Ministry in North Block. (Arvind Yadav/ Hindustan Times)

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Union Finance Minister Nirmala Sitharaman showcases a red pouch carrying the Budget documents, outside the Finance Ministry in North Block. (Arvind Yadav/ Hindustan Times)

Here is who said what on Union Budget 2024-25:

Vinod Aggarwal, President, Society of Indian Automobile Manufacturers, and MD & CEO, VECV

“The Indian Automobile Industry welcomes the continued emphasis on economic growth with several announcements especially the strong fiscal support for infrastructure in the next 5 years. The announcements such as liberal allocation for rural development & infrastructure of ₹2.66 Lakh crores is a welcome step that will boost the rural economy.

SIAM also welcomes several proposals in the budget such as:

• Measures for skilling and upskilling and support to manufacturing and employment generation.

• Support to MSMEs, many of whom form the large supplier base for the Auto sector.

• Exemption of Customs Duty on import of Lithium, Cobalt and other rare minerals and extension of concessional Customs Duty on Li-Ion Cells till March 2026; and

• Withdrawal of Equalization Levy of 2 per cent on e-transactions.

These announcements would continue to propel growth of the Indian Auto Industry."

Manish Raj Singhania, President, Federation of Automobile Dealers Associations

“The Budget 2024 is a visionary and pragmatic blueprint designed to propel our economy forward and foster a sustainable future. I am confident that this budget presented by Hon'ble FM Nirmala Sitharaman will stimulate consumption, attract substantial investments, and stabilize inflation. This budget successfully addresses the dual imperatives of economic growth and fiscal responsibility."

Pawan Munjal, Executive Chairman, Hero MotoCorp

“We welcome the Union Budget 2024-25 with its forward-looking initiatives to boost job creation with focus on urban infrastructure and strengthening the manufacturing sector. The scheme linking job creation to the employment of first-time workers is a significant step towards fostering growth and inclusion. The incentives for EPFO contributions, benefiting both employees and employers for the first four years, will provide a substantial boost to our efforts in nurturing young talent is noteworthy."

Sudarshan Venu, MD, TVS Motor Company

“The focus is on growth in this budget and the government is clearly looking at a long-term strategy. The schemes to get more people into the formal sector will go a long way in tapping into the potential of India’s young workforce, and the government’s continued commitment to infrastructure development is a big boost for economic growth and opportunities. This helps build on the momentum created in the previous two terms."

Santosh Iyer, MD & CEO, Mercedes-Benz India

“The budget clearly underlines Govt’s priorities on creating a robust foundation for a developed Indian economy. We are glad the capex on infra projects tops govt’s priority, with 3.4% GDP allocation. We were expecting GST announcement of the long-term continuation of reduced GST for BEVs; however, developing a climate finance taxonomy to aid capital for climate adaptation and mitigating climate change, is a step in the right direction for achieving climate commitments."

Rajeev Chaba, CEO Emeritus, JSW MG Motor India

"During Union Budget 2024, Honourable Finance Minister’s decision to waive import duties on critical minerals, including lithium, copper, and cobalt, is a step in right direction for the electric vehicle [EV] industry. This move will reduce battery manufacturing costs, making EVs more affordable and attractive. It will also enhance lithium-ion battery production in India, supporting localisation efforts and advancing the sector's growth. Additionally, the government's initiatives for job creation and investment in industrial training centres will ensure a skilled workforce in the automotive sector. While the budget lays a strong foundation for overall economic growth, we look forward to ongoing government’s support and incentives to accelerate green mobility and promote sustainable practices."

Vikram Gulati - Country Head and Executive Vice President, Corporate Affairs and Governance, Toyota Kirloskar Motor

“The budget is finely balanced with the government continuing to focus on infrastructure development as well as heightened outlays towards social sector, while maintaining the glide path towards fiscal consolidation by keeping the fiscal deficit at 4.9%. The thrust on welfare of farmers through enhanced productivity in the agricultural sector as well as the measures to improve women participation in the workforce will help to broaden the benefits of economic growth. The tax rationalisation will make available more disposal incomes, thereby boosting consumption which will help spur economic growth. We welcome and look forward to the various reforms that the government intends to bring within the given timeframe. Reiterating our pursuit of ‘Grow in India, Grow with India’, we at TKM are aligned with the nation’s priorities, committed with our strong efforts towards the set path of ‘Viksit Bharat’."

Bhavish Aggarwal, co-founder and CMD, Ola Electric

Exciting to see the Union Budget 2024-25 prioritizing DPI, critical minerals, and job creation. The focus on developing DPI applications in agriculture and other areas lays the data foundation for making India the AI hub of the world. The Critical Mineral Mission will be a game changer of India’s energy transition journey. Great to see emphasis on women's employment too. This budget sets a strong foundation for India's tech-driven future.

Dr Anish Shah - Group CEO and MD - Mahindra Group, and President, FICCI

“FICCI congratulates the Hon’ble Finance Minister for delivering a growth-oriented budget that has delivered both short term demand stimulus and actions focused on medium to long term growth imperatives, while maintaining fiscal discipline. The budget is inclusive, with a strong thrust on quality job creation and skilling. It also strikes a balance between agriculture and manufacturing, with elements of services. There is continuity in policy announcements. The focus on simplification and ease of doing business, boost to manufacturing, focus on research and innovation, thrust on public capex, use of technology, support to women, farmers and MSMEs, and promoting sustainability are the key themes that resonate once again in this Union Budget proposals. The focus areas of budget are very much in line with the FICCI’s key priorities for the industry and we are happy to note that many of FICCI’s suggestions have been considered in this budget, as seen in the proposals for accelerating agriculture research, enhancing participation of women workforce in manufacturing, factor market reforms for improving manufacturing competitiveness as well as measures to promote green economy."

Nirmal K Minda, Chairman and Managing Director, Uno Minda

“We welcome the Union Budget 2024-25 with its forward-looking initiatives to boost job creation with focus on urban infrastructure and strengthening the manufacturing sector. The scheme linking job creation to the employment of first-time workers is a significant step towards fostering growth and inclusion.

The incentives for EPFO contributions, benefiting both employees and employers for the first four years, will provide a substantial boost to our efforts in nurturing young talent is noteworthy.

At Uno Minda, we are encouraged by the focus on increasing women's participation in the workforce. The initiatives to set up hostels and organize women-specific skilling programs are crucial steps towards creating a more inclusive and diverse manufacturing sector. We look forward to the opportunity to engage with the government on this initiative, as empowering the youth and increasing women's participation in the workforce have always been our key priorities.

Additionally, the credit guarantee scheme for MSMEs in the manufacturing sector will play a crucial role in ensuring sustained growth and stability for small and medium enterprises, which are the backbone of our industry.

The Government’s announcement to exempt customs duty on 25 critical minerals including Lithium and Cobalt will potentially benefit battery manufacturers and thereby the EV ecosystem. The Government has maintained infrastructure capital expenditure of more than ₹11 lakh crores, provided for setting up industrial parks in 100 cities, and allocated 1.52 lakh crores for the agriculture and allied sectors. These spendings will boost consumption significantly, which will support the lower-middle-income class. This is expected to boost demand for the two-wheeler segment and entry-level cars.

The government's commitment to fiscal prudence, with a deficit target of 4.9 per cent of GDP, provides a stable macroeconomic environment for businesses to thrive. We are confident that these measures will drive sustainable and inclusive growth, positioning India as a global manufacturing hub."

Dheeraj Hinduja, Executive Chairman, Ashok Leyland

“The Finance Minister has presented a growth-oriented and pro-development Budget for 2024-25 by focusing on national infrastructure development, urban development, sustainable planning, and inclusive growth through a tech-enabled economy. With this budget, the government aims to address key issues, provide targeted support, and sets a robust agenda for growth and development. The continued emphasis on fostering investment and enhancing road infrastructure, especially in Andhra Pradesh and Bihar will facilitate growth in the manufacturing and automobile sectors. Focus on private investment in infrastructure, mining and housing sector is also likely to boost the sale of CVs. Furthermore, reduction in duties on rare earth minerals will help in promoting sustainable mobility and this resonates with our commitment to fostering a cleaner and more sustainable future."

Shradha Suri Marwah, President, Automotive Component Manufacturers Association of India, and CMD, Subros

“The budget, a blueprint for Viksit Bharat, will drive sustainable yet inclusive growth, especially in the manufacturing industry, at a rapid pace. Focus on strengthening of MSMEs through Credit Guarantee scheme and credit support during stress period, measures to bolster energy security and encouragement to start-ups by abolishing angel tax are indeed steps in the right direction. Further, the proposals for personal Income Tax will put more money in the hands of people thus fuelling consumption leading to economic growth."

ACMA is also delighted by the measures announced towards employment, skilling, internships and research. Reduction in customs duty to nil on critical minerals such as lithium, copper, cobalt, nickel etc. will encourage cell manufacturing in the country and add to the evolving EV ecosystem in the country."

Vikram Handa, MD, Epsilon Group

“Overall the Union Budget presents positive measures for various industries. For the battery sector specifically, the government’s proposal to fully exempt customs duty on critical minerals like Lithium and Nickel would definitely benefit industries in the electric vehicle (EV) battery supply chain in the short term. However, more needs to be done to develop cathode and anode manufacturing factories in India to development the EV ecosystem.

Towards developing the EV ecosystem, Indian government has been facilitating bilateral talks with many countries for acquisition of critical minerals mines for the last 2-3 years.

It is imperative to focus on the end users for critical minerals which are not battery factories but processing companies manufacturing anode, cathode and electrolyte. These companies need to be incentivized so they can further invest in domestic and foreign critical mineral assets."

Harinder Singh, Managing Director & CEO, Yokohama India

"We appreciate the Union Budget 2024 for its emphasis on infrastructure development, job creation, and skill enhancement in the manufacturing sector. The Finance Minister's introduction of programs focused on skilling and offering employment opportunities for youth represents a significant step towards economic advancement. At Yokohama India, we are particularly encouraged by the focus on diversity hiring and incentives for job creation in manufacturing facilities. These efforts resonate with our dedication to fostering a diverse and inclusive workplace, as demonstrated by our 1,000-strong female workforce across our four plants. The government's backing of internships and skill development initiatives will equip young people and strengthen our industry, driving innovation and growth. This budget signals a strong vision for India's manufacturing sector and aligns with our mutual objective of building a resilient and inclusive economy."

Prassann Daphal, CEO, Recyclekaro

"The government's announcement of a 25% waiver on customs duty for nearly 25 critical minerals is poised to drive demand across various renewable sectors, including energy storage solutions, electric vehicles (EVs), high-tech electronics, defense, and space. This initiative will bolster the refining and processing of these minerals, strengthening a resilient supply chain ecosystem. Additionally, the establishment of a 'Critical Mineral Mission' aims to oversee domestic production, recycling, and international acquisition of critical mineral assets. The mission will prioritize technology development, skilled labor, and an expanded producer responsibility framework, including Extended Producer Responsibility (EPR), which will benefit the e-waste and battery recycling sectors.

This well-planned budget reflects a strong commitment to supporting the critical minerals sector, which is crucial for advancing greener transformations."

Bhavish Aggarwal, CEO, Ola Electric

“Exciting to see the Union Budget 2024-25 prioritizing DPI, critical minerals, and job creation. The focus on developing DPI applications in agriculture and other areas lays the data foundation for making India the AI hub of the world. The Critical Mineral Mission will be a game changer of India’s energy transition journey. Great to see emphasis on women's employment too. This budget sets a strong foundation for India's tech-driven future."

Mahesh Babu, CEO, Switch Mobility

“While the Union Budget 2024 does not announce a direct electric vehicle scheme like FAME III, it includes a crucial provision that could potentially benefit India's EV ecosystem. The budget's import duty exemption for essential raw materials used in battery manufacturing is expected to support domestic cell manufacturers. By lowering the production costs for batteries, this measure has the potential to reduce the overall costs of electric vehicle acquisition, making EVs more affordable and accessible to a broader segment of the population."

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