HomeAuto Industry NewsUnion Budget 2022 Impact On Auto Industry

Union Budget 2022 Impact On Auto Industry

Hits and misses for India’s auto sector

Finance Minister Nirmala Sitharaman delivered the Union Budget 2022 to Parliament today, which includes big announcements for the Auto industry that would have a direct or indirect influence on the sector. Despite the fact that the budget did not provide much assistance to the automotive industry, it did call attention to a few other areas that may help manufacturers in other disciplines. The new battery swapping policy, electric cars for public transportation, and exposing defence R&D to commercial actors for the creation of auto components are all examples of these. Let’s take a look at some of the highlights.

Electric Vehicles For Public Transport

In the commercial vehicle sector, the Finance Minister also announced the introduction of clean and electric cars. The action will assist automakers in developing and manufacturing electric buses and commercial vehicles for public transportation, lowering the burden on fossil-fuel-powered vehicles. Furthermore, public transportation using battery-powered cars would undoubtedly benefit from decreased operating costs as well as reduced pollutants.

Expansion of National Highways

The allocation of Rs. 20,000 crore in infrastructure projects, people and goods transportation, and other major announcements made by the Finance Minister. This will also help to extend the National Highways network by 25,000 kilometres in 2022-23, with the goal of improving road conditions in our nation and increasing productivity and fuel economy. Effectively, improved roads will have a good influence on car preservation, lowering maintenance expenses.

New Battery Swapping Policy

This was undoubtedly the most important news made by the Finance Minister, since the government will soon implement a new battery swapping legislation that would benefit the whole EV industry. The action will allow key EV players, OEMs, and charging infrastructure businesses to set up battery-swapping stations and technologies in the nation, enabling for a shift from ICE-powered vehicles to electric vehicles.

Msp Payments To Increase Vehicle Demand

A Minimum Support Price (MSP) payment of Rs. 2.73 lakh crore was also stated in the Budget 2022, along with other advantages to help the farming industry, which may potentially boost demand for automobiles in rural India. Rural areas are likely to respond positively to the announcement, since they account for a large portion of vehicle manufacturers’ sales in the two-wheeler and entry-level automobile segments.

Private Auto Component Makers May R&D For Defense

This is most likely a follow-up to another major statement made earlier today, as private manufacturers can now submit bids to supply vehicle components to our defence arsenal. This change might open up new income and growth opportunities for car component manufacturers. Carmakers such as Tata Motors and Mahindra, on the other hand, have successfully delivered goods to the armed forces to date.

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