Union Budget 2023: What It Could Mean For Automotive Industry

Finance minister has declared the much awaited annual budget today, with some very interesting implications

In general, budget 2023 is likely to favour the overall growth of Indian automotive industry. Here are a few ways in which it could influence or shape the automotive scene here.

The new budget has brought down customs duties on goods other than agriculture and textiles, from 21% to 13%. This would translate to slashes in CESS and SUR charges -  meaning possible price drops for cars and SUVs this year.

Car prices dropping in 2023!

The government has increased import duties by 10%. Vehicle models brought via CBU will now have a 70% import tax slab. (engine capacity of up to 3000cc in petrol and 2500cc in diesel). 

High-end luxury and sports cars to get expensive

Import duties have been raised to 70% on CBU electric vehicles as well. Many high-end luxury and sports EVs will be affected.

EV imports to get expensive 

The new budget favours EV manufacturers and associated businesses. Capital goods and machinery for Li-io battery manufacturing have now been exempted from custom duties. This could lower the EV prices in the future. More focus will be placed on EV-infra development as well.

Electric vehicles to get more affordable

The central budget also has a strong focus on investing in and developing hydrogen fuel cells tech. 19,700 crores have been allotted to the National Hydrogen Mission, for the same. Other alternative fuels like ethanol and CNG would also be worked upon in detail this year.

Focus On Hydrogen Fuel

Ample support funds have been allocated for effective scrappage and replacements of old government vehicles -  many units of Gypsy, Quallis, Ambassador, etc will face the axe now.  The same could apply to the ambulances as well.

Push for vehicle scrappage 

Government has raised the rebate limit on personal income tax to 7 lakh/annum. This would make it easier for salaried customers to buy vehicles

Buying a car could be easier

The new budget has allotted Rs.2.7 lakh crores for 2023-2024. MoRTH (The Ministry of Road Transport and Highways)  recieves Rs. 2.7 lakh crores for roads, highways and infrastructure during this financial year

More roads and better infra coming

However it remains to be seen as how the budget will affect the fuel prices.