Budget 2026: Auto industry seeks export boost, road infra push
What's the story
The Indian automotive industry is calling for enhanced support for exports and continued investment in road infrastructure in the upcoming Union Budget. Vinnie Mehta, Director General of the Automotive Component Manufacturers Association of India (ACMA), emphasized the need for higher rates under Remission of Duties and Taxes on Exported Products (RoDTEP), better duty drawback provisions, and faster implementation of schemes to help Micro, Small and Medium Enterprises (MSMEs) integrate into global value chains.
Policy impact
Industry welcomes recent policy announcements
Mehta also welcomed recent policy announcements from the government that are expected to boost the automotive manufacturing ecosystem. He specifically mentioned a scheme by the Ministry of Heavy Industries to promote the manufacturing of Sintered Rare Earth Permanent Magnets (REPM). The industry veteran also appreciated a uniform GST of 18% across all auto components, which was a long-standing demand and has positively impacted the entire value chain.
Scheme expansion
Uno Minda calls for extension of PLI-Auto scheme
Uno Minda, one of the biggest component suppliers, has called for the extension and deepening of the PLI-Auto scheme to include EV subsystems such as sensors, semiconductors, and advanced electronics. Ravi Mehra, Managing Director of Uno Minda, said this move would be critical in strengthening domestic value addition. He also advocated for higher R&D incentives and a dedicated innovation fund for automotive electronics and clean mobility technologies.
Tax reforms
Mehra advocates for faster tax dispute resolution mechanisms
Mehra also stressed the need for faster tax dispute resolution mechanisms to free up capital for growth. He called for better ease of doing business by rationalizing GST and customs duties, resolving inverted duty structures, and providing a stable, predictable tax regime. These measures would further enhance ease of doing business in the sector.
Global positioning
Budget's role in positioning India as global hub
Mehra emphasized that with focused support on exports, talent attraction, and technology-led compliance, the Budget could play a crucial role in making India a global hub for future-ready automotive and mobility solutions. Santosh Iyer, CEO and MD at Mercedes-Benz India, also weighed in on the matter. He said while the Budget doesn't directly impact luxury car sales, certain announcements could have a trickle-down effect on the sector.