Finance Minister Nirmala Sitharamn presemted the Union Budget 2023 in the Parliament. The auto industry, especially the EV sector, received major boost from the announcement made by the FM as she declared to extend the subsidies on EV batteries for one more year. In her budget speech, Sitharaman extended the subsidy on lithium-ion batteries deployed in the electric vehicles, subsequently making EVs cheaper in India.
Also Read: Budget 2023 Expectations – From Relook at Taxes on EVs to PLI Scheme For Tyres, What Auto Industry Wants
“I propose to continue the concessional duty on lithium-ion cells for batteries for another year”, said Nirmala Sitharaman, Minister of Finance, Government of India. The Union government had introduced Production Linked Incentive (PLI) scheme for manufacturing batteries in May 2021.
“The government’s dedication to promoting environmental sustainability, as emphasized by Finance Minister Nirmala Sitharaman in the recent Union Budget 2023, is a commendable development,” stated Sameer Aggarwal, CEO and Founder of Revfin Services, an electric vehicles financing & digital lending platform.
Surprisingly, the FM didn’t mention the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme even once in her speech as the EV industry was hoping for an extension as well as increase in funds. The FAME policy had already received a two year extension in 2021 and is scheduled to expire in March 2024.
Mr. Samrath Kochar, CEO & Founder of India’s largest Li-ion battery manufacturer Trontek said, “The budget is pragmatic and has taken the right steps towards advancing green mobility adoption in the country. Extension of customs duty exemption on Li-ion cells and removal of customs duty on imported machinery used for manufacturing Li-ion batteries will bring down the cost of EV batteries thereby reducing the cost of EV adoption. Going forward, we are certain that the Government will also look at bringing a PLI scheme for battery pack manufacturers and also reduce GST on batteries to benefit the many MSMEs operating in the EV sector.”
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