The Union Budget 2026 has presented a comprehensive set of measures aimed at strengthening India's green energy and mobility ecosystem. From mandating phased blending of Compressed Bio Gas (CBG) in CNG and PNG, to expanding the electric vehicle ecosystem through manufacturing support and charging infrastructure, the Budget signals a decisive push toward sustainability. Key proposals also include incentives for EV battery production, duty exemptions on critical minerals, and tax relief for accident compensation claimants.
Also Read: Union Budget 2026: Finance Minister Announces Tax Exemption On Motor Accident Claims
During the announcement, Nirmala Sitharaman announced that the phased mandatory blending of Compressed Bio Gas (CBG) in Compressed Natural Gas (CNG) for transport and Piped Natural Gas (PNG) for domestic purposes to be mandated.
"Our Government will expand and strengthen the e-vehicle ecosystem by supporting manufacturing and charging infrastructure", the Finance Minister said while announcing that greater adoption of e-buses for public transport networks will be encouraged through payment security mechanisms.
Also Read: Union Budget 2026: Here's What To Expect For Automotive Sector
The budget proposes to add 35 additional capital goods for EV battery manufacturing, and 28 additional capital goods for mobile phone battery manufacturing to the list of exempted capital goods. "This will boost domestic manufacture of lithium-ion batteries, both for mobile phones and electric vehicles", FM stated in her speech.
The budget also proposes to fully exempt Basic Customs Duty on cobalt powder and waste, the scrap of lithium-ion battery, Lead, Zinc and 12 more critical minerals. The Finance Minister said that this will help secure their availability for manufacturing in India and promote more jobs for our youth. This is in addition to the 25 critical minerals fully exempted from BCD in the July 2024 Budget.
Also, among the key announcements, the Finance Minister proposed that any interest awarded by the Motor Accident Claims Tribunal to a natural person will be fully exempt from income tax during the financial year 2026-27.
In a significant relief for claimants, the Minister further declared that tax deducted at source (TDS) on such interest will be abolished, ensuring beneficiaries receive their compensation in full without deductions. This move is expected to provide greater financial security to accident victims and streamline the disbursement process, reflecting the government's commitment to citizen welfare and justice.