Post 2026 Budget reactions from Auto sector
SIAM Statement on Union Budget 2026-27; Mr Shailesh Chandra, President, SIAM and MD & CEO, Tata Motors Passenger Vehicles Ltd
"We welcome the Union Budget 2026–27, which continues to focus on long-term, sustained economic growth with a strong emphasis on manufacturing, infrastructure including freight corridors & waterways and fiscal prudence. The decision to raise the capital expenditure target to Rs 12.2 lakh crore for FY 2026-27 from Rs 11.2 lakh crore in the current year will provide a strong impetus to demand creation and industrial activity, including the Automobile sector. Enhanced support for electronic components manufacturing, setting up dedicated corridors for mining and processing of rare earth, along with initiatives to establish high-tech tool rooms and supporting container manufacturing, will develop supply chain resilience and help in streamlining exports. The allocation of 4,000 e-buses for the Purvodaya States will accelerate the transition toward sustainable public mobility solutions. Continued exemption of Basic Customs Duty on Capital Goods used for manufacturing lithium-ion batteries, along with the extension of concessional duty benefits for lithium-ion cells and their parts used in manufacturing batteries for electric and hybrid vehicles for a further two years till March 2028, will enable creation of a robust EV ecosystem in the country."
Mr. C.S. Vigneshwar, President, Federation of Automobile Dealers Associations (FADA)
"The Union Budget 2026-27 presents a robust roadmap for the various sector’s transition toward a sustainable and technologically advanced future. We particularly welcome the government's commitment to the electric vehicle (EV) ecosystem by extending basic customs duty exemptions for capital goods used in manufacturing Lithium-Ion Cells,. This, combined with the establishment of Rare Earth Corridors in mineral-rich states to support permanent magnet manufacturing, will significantly bolster domestic EV production and affordability. The push for green mobility is further strengthened by the provision of 4,000 e-buses for the North-East and Purvodaya regions, and the exclusion of biogas value from Central Excise duty on blended CNG,. These measures, alongside the India Semiconductor Mission 2.0, will help stabilize the supply chain for modern vehicles. For our dealer community, many of whom are MSMEs, the ₹10,000 crore SME Growth Fund and the mandating of TReDS for settlement are pivotal steps toward improving liquidity and growth,. Additionally, the Income Tax exemption for interest awarded by Motor Accident Claims Tribunals (MACT) is a welcome relief for individual vehicle owners and victims,. Overall, this budget balances industrial scaling with consumer-centric tax reforms."
Mr. Jyoti Malhotra, Managing Director, Volvo Car India:
“The continued focus on maintaining and improving the current growth rate in the Union Budget 2026-27 should help the economy to enhance productivity and competitiveness, by building resilience to a volatile global economy. The budget proposals are a welcome move for the entire productive sector, including the mobility sector. The maintenance and sustenance of growth will encourage consumption across the board, creating a larger market for high value items. Coupled with ease of handling direct taxation and customs related rules, the economy should continue in an upward trend. Overall the measures are targeted at maintaining the momentum of the Indian economy.”
Mr. Santosh Iyer, MD & CEO, Mercedes-Benz India:
“Budget's strong focus on infrastructural development, with addition of Rs 1 lakh crore in capex, is a step in right direction developing the country’s evolving mobility ecosystem. Better highways and improved intercity connectivity have historically driven luxury car demand in India. The fiscal prudence reflected in the 4.3% deficit target, combined with strong focus on exports, sends a strong signal of macroeconomic stability, which may lead to a less volatile currency. Overall, the emphasis of the budget is on strengthening ease of doing business, and the deferral of customs duty payments up to 30 days, can improve cash flow significantly. This budget primarily focuses more on long-term gains, rather than immediate ones.”
Mr. Tarun Garg, MD & CEO, Hyundai Motor India Limited:
"Further building on the mega GST 2.0 reforms, the Union Budget 2026–27 presents a long-term focused roadmap that accelerates India’s rise as a global manufacturing hub and Atmanirbhar Bharat. Focus on the rare earth corridor, EV Battery and Electronics manufacturing, MSME empowerment, inclusivity and AI investments position India for global leadership. The strong push for tourism, rural growth and enhanced regional connectivity will further spur economic activity and open new avenues for advanced mobility, logistics and transportation solutions. With a bold capital outlay, simplified taxation and improved ease of doing business, this Budget is a decisive step towards a healthy and Viksit Bharat, reinforcing confidence in India’s growth story."
Dr. Raghupati Singhania, Chairman & Managing Director, JK Tyre & Industries:
“The Union Budget FY26–27 reinforces India’s commitment to manufacturing-led growth. The continued drive on capital expenditure, with infrastructure allocation exceeding ₹12 lakh crore, alongside fiscal consolidation at 4.3%, strikes a prudent balance between growth stimulus and macroeconomic stability. Enhanced support to the Self-Reliant India Fund will further strengthen the manufacturing and MSME ecosystem. For the automotive and tyre sectors, sustained investments in infrastructure and logistics will improve cost efficiencies and support demand momentum. The emphasis on tourism and extensive program of skilling the workforce will go a long way in generating employments. In the context of evolving global trade dynamics, continued focus on ease of doing business, technology adoption, and policy stability will be critical to attract investment and scale exports, strengthening long-term growth momentum.”
Mr. Hardeep Singh Brar, President and CEO, BMW Group India:
"The Government’s focus on logistics improvement such as accelerating customs clearance of goods (via AEO programme) will make them available for manufacturing activity faster. Also, the reforms in tax compliances like longer validity of Advance Rulings in customs duty (from 3 to 5 years) will give more certainty to business operations. These long-term investments from the centre will have a direct multiplier effect on auto market. Budget has reinforced the fundamentals that matter most to the auto segment - economic stability, policy predictability and sustained infrastructure development. Recent initiatives taken before the budget like GST reforms and conclusion of various FTA's are already very positive steps taken by the Government for auto sector. For premium customers, confidence is the biggest driver, and this Budget further strengthens that confidence while creating the right conditions for long-term, sustainable growth in mobility."
Mr. Stéphane Deblaise, CEO, Renault Group India:
"The Union Budget 2026–27 sends a strong and reassuring signal of policy continuity and intent for India’s manufacturing-led growth. Anchored in the Kartavya pillars for Viksit Bharat, the Budget demonstrates a clear commitment to building resilience, competitiveness and technological depth across strategic sectors. The progression to India Semiconductor Mission 2.0, with its focus on equipment, materials, full-stack Indian IP and supply-chain strengthening, aligns closely with the evolving needs of the industry. The targeted push to reduce critical import dependencies, through initiatives on rare earth magnets and continued customs duty exemptions on capital goods for lithium-ion cells, creates confidence for deeper localisation and sustainable mobility. Supported by public capital expenditure of ₹12.2 lakh crore and enhanced logistics corridors, the Budget provides greater momentum to responsible growth of the Indian economy."
Mr. Harinder Singh, Managing Director & CEO, Yokohama India Pvt. Ltd.
"The Union Budget’s continued emphasis on manufacturing depth, infrastructure expansion, critical mineral ecosystems and clean energy value chains sends a strong and progressive signal for India’s industrial future. Enhanced support for electronic components manufacturing, battery storage, lithium-ion cells and critical minerals creates long-term policy visibility for EV platform localisation, battery assembly and advanced power electronics manufacturing, thereby strengthening investment confidence across emerging mobility ecosystems. At Yokohama India, where we continue to expand our domestic production footprint with a strong focus on localisation, sustainability and high value-added products, this policy direction reinforces confidence to accelerate investments in capacity, technology and next-generation manufacturing aligned with India’s long-term growth trajectory."
Mr. Balbir Singh Dhillon, Brand Director, Audi India:
"The Union Budget’s strong emphasis on infrastructure and capital expenditure is a positive enabler for India’s mobility landscape. Improved highways and intercity connectivity, especially across Tier-II and Tier-III markets, are strengthening the ownership and usage ecosystem for luxury automobiles. The government’s focus on fiscal prudence, macroeconomic stability, and ease of doing business reinforces confidence for long-term investments in the automotive sector. Initiatives like the development of rare earth corridors and the advancement of ISM 2.0 under the India Semiconductor Mission are timely and critical. They signal a clear intent to build resilient domestic supply chains and a technology-driven manufacturing ecosystem that will support the future of automotive and electric mobility in India."
Mr. Sudarshan Venu, Chairman, TVS Motor Company
"The Union Budget 2026 provides a strong and consistent policy framework for India’s emergence has a global powerhouse under the leadership of Prime Minister Narendra Modi. The sustained push on infrastructure, higher capital expenditure, and reforms aimed at easing business conditions will help in attracting private investment and strengthening supply-chain resilience. We welcome the focus on clean energy solutions, MSME growth, and technology-led inclusion - benefiting farmers, women in STEM, youth, and the differently abled. The focus on scaling manufacturing in strategic sectors, building domestic value chains for critical minerals and rare earths, and expanding semiconductor and advanced technology capabilities will be vital for the future of EVs, electronics, and next-generation mobility."
Mr. Dilip Chandak, Managing Director of Vega Helmets
"Budget 2026-27's exemption of TDS and income tax on MACT interest awards is a pragmatic, victim-centric reform that addresses a critical pain point in India's road accident ecosystem—where claims often drag for years, eroding real value through deductions and inflation. This ensures full payouts reach natural persons faster, reducing financial distress for families while nudging insurers toward timelier settlements, potentially lowering systemic costs. From Vega's vantage as a helmet leader producing millions annually, this pairs perfectly with MSME boosts and infra pushes to amplify prevention: imagine helmet compliance rising 20-30% via awareness campaigns tied to economic incentives, slashing accidents by thousands yearly and fueling sustainable growth in legacy sectors like ours. FM Sitharaman's vision aligns fiscal relief with safety – now, let's enforce it on the ground."
