Budget 2025: What It Means for the Indian EV Sector

The Union Budget 2025 marks a pivotal moment for India’s Electric Vehicle (EV) sector, reinforcing the government’s commitment to clean mobility, domestic manufacturing, and sustainable infrastructure. With targeted policies and increased allocations, the budget lays the foundation for faster EV adoption and stronger industry growth.

Boost to EV Manufacturing through FAME III and PLI Schemes

Budget 2025 introduces the third phase of the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme with enhanced incentives for electric two-wheelers, three-wheelers, buses, and commercial vehicles. FAME III places a stronger emphasis on supporting domestic manufacturers, especially for key components like battery packs, motors, and power electronics.
In parallel, the Production Linked Incentive (PLI) scheme has been extended to cover advanced chemistry cell (ACC) battery storage and essential EV components. This move will attract global and local investments, enhance indigenous production, reduce import dependence, and create large-scale employment in the EV manufacturing sector.

Charging Infrastructure Expansion to Power EV Adoption

Recognizing the need for accessible and reliable charging, the budget allocates substantial funding for the development of nationwide EV charging infrastructure. Focus areas include national highways, smart cities, industrial corridors, and public parking zones.
The government plans to implement a Public-Private Partnership (PPP) model and provide viability gap funding to attract private players. This initiative aims to build thousands of fast-charging and battery-swapping stations, directly addressing range anxiety and making EVs more practical for daily use.

Incentives for Buyers and Startups to Drive Market Growth

To encourage EV adoption, Budget 2025 extends the income tax deduction on loan interest for EV buyers under Section 80EEB. This move makes EV financing more attractive for middle-class consumers and small businesses.
Startups in the EV and clean mobility sectors receive a further boost through simplified compliance, reduced GST on EV parts, and dedicated funds for green innovation. Easing import duties on critical EV components will also lower production costs and retail prices, giving Indian consumers more affordable and diverse EV choices.

Conclusion
Budget 2025 delivers a strong policy framework that supports the entire EV value chain—from manufacturing and infrastructure to financing and adoption. With clearer roadmaps, financial incentives, and a focus on sustainability, the Indian EV sector is poised for transformative growth. As these initiatives unfold, they will help accelerate India’s transition to clean mobility, positioning the country as a global leader in the green transport revolution.