Union Budget 2023-24 Focuses On Green Mobility

India's Union Budget 2023 was presented on February 1st, 2023 by Finance Minister Nirmala Sitharaman. Unlike last year's budget, she had far more provisions announced for the automobile industry. Here are some of the key highlights:

• Customs duty: 

To further push the development and local manufacture of EVs the finance minister has announced a custom duty concession (from 21% to 13%) on the import of capital goods and machinery required to manufacture Lithium-ion batteries for EVs.

While at the same time, she has also increased customs duty on SKD (semi-knocked down kit) and CBU (completely built units) encouraging manufacturers to local manufacture and assemble cars. The custom duty on SKDs has been hiked from 33% to 35%. While on CBUs it has been hiked from 60% to 70%.

• Focus on electric vehicles: 

The government has announced a phased manufacturing program for electric vehicles (EVs) and their components, intending to achieve zero carbon emissions by 2070. To support this, the government has allocated INR 35,000 crore. The funds will help transition from fossil fuel-powered mobility solutions to eco-friendly ones. 

To lead by example honorable finance minister has made provisions to replace old government vehicles and ambulances in the center and will encourage states to do the same. 

Alongside she also announced support for battery storage systems with a capacity of  4,000 MWh. Finally, the FAME-2 scheme has been extended till 2024 and the allocation of funds has been increased from INR 2,908 crore to INR 5,172 crore. 

• Support for the production of green hydrogen (National Green Hydrogen Mission): 

The union government and Union Minister Nitin Gadkari have been vehement supporters of hydrogen as a fuel for clean mobility. Taking it further finance minister announced INR 19,700 crore in funds for the production of green hydrogen. She also set a target of 5 million metric tons to be achieved by 2030 thus allowing India to be among the top hydrogen fuel-producing countries in the world.

Overall, the Union Budget 2023 has boosted the automobile industry, focusing on developing electric vehicles, infrastructure, and technology. The measures proposed by the government are expected to encourage local manufacturing, reduce dependence on imports, and make the Indian automotive industry more competitive in the global market.

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