Chennai, Feb 1 (.) Electric vehicle makers today welcomed the budgetary proposals of union Finance Minister Nirmala Sitharaman and termed them as growth oriented for their industry.
According to Madhumita Agrawal, Founder and CEO of Oben Electric, the government’s focus on expanding the Rare Earth Permanent Magnet Scheme and creating dedicated rare earth corridors would play a critical role in securing essential materials for EV manufacturing.
She noted that rare earth magnets are vital components of electric motors and that strengthening capabilities across mining, processing, and advanced manufacturing would help establish a more reliable domestic supply chain.
Agrawal also highlighted the India Semiconductor Mission 2.0 and the Electronics Components Manufacturing Scheme as important initiatives to build local capabilities in semiconductors and electronic components, particularly as electric motorcycle manufacturing scales in India.
Echoing her was Kunal Arya, Co-founder and Managing Director of Zelio E Mobility, who said the union Budget 2026–27 marks a significant step toward transforming India’s electric two-wheeler segment into a comprehensive industrial ecosystem.
Arya emphasized that the focus on rare earth magnets and mineral corridors in resource-rich states is crucial for securing materials used in electric drivetrains.
Welcoming the reduction in customs duty on capital goods for lithium-ion batteries, Arya said the move would help lower manufacturing costs and encourage localisation.
Arya further noted that government support for MSMEs, including the Rs.10,000-crore SME Growth Fund, would enable companies to expand capacity, accelerate innovation, and compete globally.
On his part Sameer Moidin, Founder and CEO of EVeium Smart Mobility, pointed out that electric two-wheelers require significantly higher semiconductor and electronic content compared to internal combustion engine vehicles, yet the industry remains largely dependent on imports for critical components.
He said initiatives like the India Semiconductor Mission 2.0 and the enhanced Rs.40,000 crore allocation for electronics component manufacturing are encouraging steps toward building domestic capabilities.
Moidin also welcomed the focus on rare earth permanent magnets, dedicated mineral corridors, and the development of high-tech tool rooms and chemical parks, which he said would strengthen domestic mining and component manufacturing. However, he cautioned that the inverted GST structure—where inputs are taxed at a higher rate than finished EVs—continues to pose challenges and needs to be addressed to make electric two-wheelers more affordable and scalable for mass adoption.
Industry leaders said that while the budget provides a clear direction for strengthening India’s EV manufacturing ecosystem, further policy support—particularly in areas such as battery cell manufacturing, motor controllers, and tax rationalisation—would be key to accelerating adoption and ensuring long-term competitiveness.
. VJ GV 2152