Union Budget 2026: Here's What To Expect For Automotive Sector

As the Union Budget 2026-27 approaches, India's automotive industry is gearing up with a set of clear expectations that reflect the sector's evolving priorities. With increasing focus on electric mobility, manufacturing competitiveness and global trade integration, automakers and industry stakeholders are hopeful that Budget 2026 will deliver the policy clarity and fiscal support needed to sustain growth in a rapidly changing landscape. Here's what the 2026 union budget might have for the Indian auto industry.

PLI Reinforcement

According to an EY India report, the Union Budget 2026 is expected to strengthen green mobility solutions, with proposals like a unified EV super app. This app would streamline the electric vehicle ecosystem by offering real-time slot booking, integrated payments, charger availability updates, and progress dashboards to track nationwide deployment under the PM E-Drive scheme. Such digital integration is aimed at simplifying EV ownership, improving charging convenience, and accelerating India's transition toward sustainable mobility.

There is growing anticipation that Union Budget 2026-27 will introduce fresh incentives for domestic battery gigafactories, alongside measures to strengthen India's charging infrastructure through tools such as viability gap funding and tax concessions. The budget is also expected to reaffirm commitment to ensuring adequate funding, smoother disbursement, and better alignment between central and state incentives.

Duty Reforms For Global Automakers

The new budget is expected to bring duty reforms for global automakers, particularly targeting the fast-growing electric vehicle segment. Rationalisation of import duties, paired with well-calibrated incentives, could encourage multinational manufacturers to invest more deeply in India's sustainable mobility ecosystem. Such measures would not only attract foreign capital but also accelerate EV adoption, positioning India as a competitive hub for clean automotive technologies and future-ready manufacturing.

Support For Local Automakers

Skoda Auto Volkswagen India MD and CEO, Piyush Arora, has emphasised that local production must receive sustained support in the upcoming Union Budget. He highlighted that increased allocation for road and transport infrastructure, along with a renewed push for customs reforms, would be timely steps to enhance trade efficiency and unlock India's economic potential. Arora also stressed that rationalising the inverted duty structure for EVs will be crucial to strengthening domestic manufacturing and boosting competitiveness in the global market.

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Infrastructure Push And Tax Rationalisation

Audi India Brand Director, Balbir Singh Dhillon, underlined the importance of continued emphasis on infrastructure development, particularly in roads and high-speed charging networks, to accelerate growth in the luxury car segment. He added that rationalisation of taxes and duties, coupled with a stable long-term policy framework and steady foreign exchange conditions, will be critical for sustaining momentum. Dhillon expressed optimism that the forthcoming Union Budget will act as a catalyst for boosting overall consumption, including luxury automobiles.