Union Budget 2024 may prove to be the supercharger that India’s EV sector and startups need

The government of India unveiled its annual budget today, emphasizing a significant stimulus for the import of critical minerals essential to the electronics manufacturing and startup sectors. This move is particularly pivotal for India’s burgeoning electric vehicle (EV) industry, which relies heavily on these minerals for battery production and other key components.

Industry leaders have reacted positively, expressing optimism about the budget’s potential to accelerate growth and innovation in the EV sector.

The increased availability of critical minerals is expected to reduce production costs, enhance technological advancements, and position India as a major hub for electric vehicles and EV batteries. This strategic focus not only supports the country’s environmental goals but also bolsters economic development by fostering new business opportunities and creating jobs.

Commitment to Clean Energy and Infrastructure
Harry Bajaj, Founder and CEO of Mobec, praised the budget’s focus on sustainable development. “The introduction of the PM Surya Ghar Muft Yojana, providing rooftop solar panels and up to 300 units of free electricity to 1 crore households, is a significant step towards democratizing access to clean energy,” he said.

Bajaj also highlighted the budget’s emphasis on advanced ultra-supercritical thermal power plants and critical mineral recycling, which he believes will strengthen India’s green infrastructure. He noted, “The energy audit and financial support for MSMEs will drive the adoption of cleaner energy sources in key industrial clusters.”

Support for the EV Sector
Akshit Bansal, CEO and Founder of Statiq, appreciated the waiver of import duties on key minerals like lithium. This move is expected to lower the manufacturing costs of EV batteries and reduce EV prices for consumers, accelerating the adoption of electric vehicles across the nation. “This move will accelerate the adoption of electric vehicles across the nation,” Bansal said.

Making Electric Vehicles More Affordable
Pratik Kamdar, CEO and Co-Founder of Neuron Energy, emphasized the positive impact of exempting custom duties on critical minerals like lithium and cobalt. “This pivotal move will substantially lower the production costs of battery cells, directly translating into more affordable electric vehicles (EVs) for consumers,” Kamdar stated.

He believes that reducing manufacturing expenses will decrease the overall cost of EV batteries, making electric vehicles more economically viable. “This initiative supports the growth of the EV industry and reinforces India’s commitment to sustainable mobility solutions. We anticipate these measures will stimulate greater adoption of EVs, driving positive change towards a cleaner and greener transportation ecosystem,” he added.

Promoting Workforce Participation and Skilling
Rashi Agarwal, Co-Founder and CBO of Zypp Electric, applauded the budget’s focus on increasing women’s workforce participation and youth skilling. “These are significant steps towards addressing key barriers women face in the workforce, promoting gender equality and economic empowerment,” she said.

Agarwal noted that the youth skilling initiative would enhance workforce skills and employability, driving industry growth and boosting the gig economy, particularly increasing two-wheeler and three-wheeler sales beyond metropolitan areas.

However, she expressed some disappointment, stating, “We anticipated announcements on the FAME-III policy and special incentives for the EV sector, which weren’t part of this budget. Maintaining policy consistency will be essential for the overall expansion of the electric vehicle market.”

Infrastructure Development and Economic Growth
Devndra Chawla, MD and CEO of GreenCell Mobility, appreciated the significant steps taken towards infrastructure development and sustainable transportation. “The proposal of industrial parks and road connectivity projects, including the Rs 26,000 crore investment in road infrastructure, will go a long way towards achieving the vision of Viksit Bharat,” Chawla remarked.

He is optimistic about the positive ripple effect these initiatives will have on the economy, enhancing the quality of life for millions of Indians by facilitating easier commutes, reducing travel times, and supporting the growth of urban and semi-urban areas.

“The creation of a climate finance taxonomy will boost capital availability for climate adaptation and mitigation, helping India meet its climate commitments and fast track green transition,” he added.

Chawla also praised the government’s initiative to transform iconic tourist hubs, stating, “With robust state-level marketing and branding, these efforts are set to make a big impact.

The launch of a new rating system for tourist centres, focusing on the quality of facilities, marks a significant move towards boosting India’s tourism infrastructure. This innovative framework promises to elevate visitor experiences and position India as a top travel destination.”

Overall, industry leaders are hopeful that the Union Budget 2024 will drive sustainable growth, boost the adoption of electric vehicles, and enhance India’s green infrastructure, aligning with the nation’s commitment to a cleaner and more prosperous future.