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Last Updated: 04/12/2025

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Budget 2026 Sparks Hope For EV Buyers: What’s In It For Electric Vehicles?

ABP Live

23 hours ago

1

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The Union Budget 2026 has brought positive news for India’s electric vehicle and clean energy sectors. Finance Minister Nirmala Sitharaman announced several tax and duty benefits aimed at supporting battery manufacturing, energy storage, and cleaner fuels during her budget speech in Parliament.

To support domestic battery production, the government has decided to continue the basic Customs Duty exemption on capital goods used for making lithium-ion battery cells. This benefit will now also apply to equipment used for manufacturing lithium-ion cells meant for battery energy storage systems.

These steps are expected to reduce production costs and encourage companies to set up or expand battery manufacturing units in India. Since batteries are a key part of electric vehicles, the move will indirectly support EV production and adoption across the country.

Support For EV Growth And Energy Storage

Lithium-ion batteries play a crucial role not only in electric vehicles but also in storing renewable energy like solar and wind power. By extending duty exemptions to energy storage systems, the government aims to strengthen India’s clean energy infrastructure and reduce dependence on imports.

Industry experts believe this will help India move closer to becoming self-reliant in advanced battery technologies.

Push for Critical Minerals Processing

The Finance Minister also announced customs duty exemption on the import of capital goods needed for processing critical minerals in India. These minerals are essential for battery production and clean energy technologies.

This move is expected to improve domestic mineral processing capabilities and support long-term growth of the EV and renewable energy sectors.

Tax Relief For Biogas-Blended CNG

In another important announcement, FM Sitharaman said that the full value of biogas will be excluded while calculating the central excise duty on biogas-blended CNG. This change is aimed at encouraging the use of biogas as a cleaner and more sustainable fuel option.

The step is likely to support waste-to-energy projects and promote greener fuels for transportation.

What It Means

Overall, the Budget 2026 sends a strong message in favour of clean mobility, local manufacturing, and sustainable energy. With targeted tax relief and duty exemptions, the government is trying to make electric vehicles and clean fuels more affordable and attractive.