Ahead of Union Budget 2026-27, EV industry seeks PLI tweaks, R&D tax relief and supply-chain support to scale adoption
With Budget 2026-27 a week away, the electric-vehicle sector is pushing for measures that reduce costs and boost domestic manufacturing. Industry expectations include recalibrated PLI eligibility, targeted tax incentives for R&D and capital goods, and policy clarity to strengthen the full EV value chain.
- Reporting desk
- Health India Network News Desk
- First published
New Delhi: With the Union Budget 2026-27 due in about a week, India’s electric-vehicle (EV) ecosystem is looking for a sharper policy push to accelerate adoption and expand domestic manufacturing. Industry voices expect the government to use the Budget to reduce friction points in incentives and improve the economics of local production across batteries, power electronics and other critical components.
Deloitte India, in comments cited by ANI, said the upcoming Budget could focus on strengthening domestic manufacturing capacity and encouraging investment throughout the EV value chain. One of the key requests from the industry is to recalibrate Production-Linked Incentives (PLI) for EVs and advanced automotive components so that more manufacturers—especially startups and smaller suppliers—can qualify under the scheme.
According to the analysis, targeted tax breaks for research and development, and support for capital goods used in EV and automotive manufacturing, could help companies that have not been able to access incentives due to stringent thresholds and eligibility conditions. Industry participants argue that better-aligned incentives would reduce import dependence for technologies and components, while also supporting localisation of higher-value parts.
Stakeholders are also seeking relief around domestic value-addition norms and investment thresholds under incentive programmes, so that the benefits are not restricted to a narrow set of large players. The expectation is that broader eligibility could strengthen supplier networks and deepen manufacturing capabilities, which in turn can make EVs more affordable for consumers over time.
Beyond direct incentives, the industry has flagged concerns around indirect tax structures that can raise costs. While broad GST rate cuts are viewed as unlikely after recent reforms, EV makers and suppliers continue to highlight issues such as inverted duty structures. Addressing these through better refund mechanisms or export-linked relief could improve cost competitiveness and reduce the need to pass embedded costs into vehicle pricing.
The sector’s pitch to the government is also linked to macro goals: a stronger EV manufacturing base can reduce the crude oil import bill, improve external balances and support India’s clean-mobility roadmap. Companies say a well-designed mix of incentives, tax relief and regulatory clarity in Budget 2026-27 could speed up investment decisions and unlock scale in the next phase of the EV transition.