Union Budget 2022 should give a strong push to the Indian automobile industry through rapid growth of EV sector and nationwide infrastructure
The Union Budget 2022 included several announcements for the automobile industry. While it did not offer much to the badly performing automobile sector, the government has highlighted new revenue and growth areas that might interest automakers. This includes a new battery swapping policy and electric vehicles for public transport. Additionally, the defense R&D will be opened to private players for the development of auto components. Let’s see the direct or indirect Effects of Union Budget 2022 on Indian Automobile Sector
Effects of Union Budget 2022 on Indian Automobile Sector
There has been a new focus on electric vehicles in recent years. Now, the Indian government has announced the addition of electric vehicles in the commercial vehicle sector. This means that different auto companies will manufacture electric buses and electric commercial vehicles for public transport. To further support the EV ecosystem, a New Battery Swapping Policy will soon be introduced in the country. This will allow major players and OEMs to set up battery-swapping stations across the country.
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The Finance Minister also announced an allocation of Rs 20,000 crore for infrastructure projects. This is bound to create a demand for new commercial vehicles. Additionally, the government is opening R&D defense to private auto component makers. Now, private companies will be able to supply auto components to our defense arsenal. This opens up a new revenue and growth area. Companies like Tata Motors and Mahindra have already delivered products to the armed forces.
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In addition to the auto technology, the expansion of national highways is also set to help in improving the road conditions in India. This will indirectly improve the productivity and fuel efficiency of vehicles. Good roads can significantly reduce car/ bike repair costs. Overall, the budget did not offer revolutionary developments for the auto sector. However, on the positive side, the electric segment is bound to get a boost in the coming years. We might see the development of new EV technology and more models in different segments.
