New Delhi: India is the world’s third-largest automobile market, and the sector has witnessed significant positive changes over the years. However, there are still certain challenges that require the attention of policymakers, and it is crucial that focused efforts are made to address these issues. As the country prepares for Finance Minister Nirmala Sitharaman’s Budget speech on February 1, automotive industry experts are closely watching for potential relief measures for this sector that contributes more than 7% to India’s overall GDP.

Alternative Fuels
The ever-evolving auto sector is undergoing a significant transformation towards clean fuel technologies. While electric vehicles (EVs) attract a GST rate of 5%, industry is also looking at incentives for alternate fuel technologies like hybrids, hydrogen and flex-fuels.

Vaibhav Pratap Singh, Executive Director, Climate and Sustainability Initiative (CSI) said given their long payback periods, extending incentives and establishing dedicated financing options for EVs is also crucial to sustain momentum and meet electrification goals, particularly for larger vehicles like buses and trucks.

Originally published in The Economic Times – ET Auto (Online)