The Union Budget presented by Finance Minister Nirmala Sitharaman underscored the government’s long-term commitment to steady, broad-based economic growth. The message was clear: India’s progress will continue to be driven by strong investments in capacity building, connectivity and sound fiscal management. The auto industry, too, largely welcomed the Budget, viewing it as a positive step toward sustained sectoral momentum.
Speaking on the Budget announcements, Mr. Shailesh Chandra, President, SIAM and MD & CEO, Tata Motors Passenger Vehicles Ltd, said, the Union Budget 2026–27 sends a strong signal of long-term economic stability and growth. The major increase in capital expenditure will boost demand and support industries like automotive and manufacturing. Enhanced incentives for electronics, rare-earth processing and tooling will strengthen supply chains and improve India’s export readiness. The plan to deploy 4,000 e-buses will give a push to greener public transport. Continued duty benefits for battery manufacturing will further accelerate the growth of India’s EV ecosystem.
According to Mr. Tarun Garg, MD & CEO, Hyundai Motor India Limited, said, the Budget builds strongly on the momentum created by GST 2.0 and sets out a clear long-term roadmap for India’s growth. With its push on rare-earth corridors, EV battery and electronics manufacturing, MSME support, inclusivity and AI-led innovation, it positions India to emerge as a global manufacturing hub. The focus on tourism, rural development and regional connectivity will boost economic activity and create new opportunities for mobility and logistics. With higher capital spending, simpler taxation and better ease of doing business, this Budget reinforces confidence in India’s journey towards becoming a truly developed economy.
Mr. Santosh Iyer, MD & CEO, Mercedes-Benz India said, the strong push for infrastructure with an additional ₹1 lakh crore in capex will help strengthen India’s mobility ecosystem, especially through better highways and intercity connectivity. The 4.3% fiscal deficit target and focus on exports signal economic stability, which could also help reduce currency volatility. Measures like easier customs duty payments and the continued push for ease of doing business will support long-term industry growth more than immediate gains.
Mr. Piyush Arora, Managing Director & CEO, Škoda Auto Volkswagen India, welcomed the Budget stating that it gives a clear and steady direction for India’s long-term economic priorities as the country moves toward the Viksit Bharat 2047 goal. Its focus on manufacturing competitiveness, easier trade, and progress on the India–EU FTA strengthens India’s role in global automotive supply chains. Support for SMEs and efforts to revive older industrial clusters will further deepen the country’s manufacturing base. For Škoda Auto Volkswagen India, this aligns well with our commitment to “Make in India, for India and the world,” as we continue to advance localisation, skilling and sustainable mobility initiatives.
According to Mr. Balbir Singh Dhillon, Brand Director, Audi India, the Union Budget’s strong push for infrastructure and capital investment is a big boost for India’s mobility sector. Better highways and improved connectivity across Tier-II and Tier-III cities are helping expand the market for premium and luxury vehicles. The focus on fiscal discipline and ease of doing business builds confidence for long-term automotive investments. Equally important are the steps to develop rare-earth corridors and strengthen India’s semiconductor ecosystem through ISM 2.0, which will help build resilient supply chains and support the future of EVs and advanced automotive technologies.
Commercial Vehicles
Mr. Dheeraj Hinduja, Chairman, Ashok Leyland, said, the Budget is clearly growth-oriented and supports the Prime Minister’s vision of a strong, self-reliant India. Higher investment in infrastructure, manufacturing and defence will boost the economy and create steady demand for commercial vehicles. The focus on roads, logistics and construction strengthens long-term growth, while initiatives in AI, rare earths and clean energy push India toward a modern, technology-driven future.
Mr. Alexander Schoen, Chief Financial Officer, Daimler India Commercial Vehicles, said, the continued push for better roads, connectivity and a new dedicated freight corridor from Dankuni to Surat will boost logistics efficiency and support commercial vehicle demand. The focus on MSMEs, semiconductors, advanced materials and domestic capability-building will improve India’s overall manufacturing competitiveness. Overall, the Budget creates a positive environment for the commercial vehicle industry to invest, innovate and support India’s shift toward a more future-ready mobility ecosystem.
Mr. Kamal Bali, President & Managing Director, Volvo Group India, said, the Union Budget 2026–27 clearly shows the government’s commitment to keeping India’s growth strong and stable. By supporting youth, MSMEs and the manufacturing sector, along with reforms like GST 2.0 and the new IT and labour codes, the Budget gives investors long-term policy clarity. Measures such as expanded safe-harbour norms and easier transfer-pricing rules will reduce disputes and build confidence. With continued public investment in physical and digital infrastructure, India is positioning itself as one of the most trusted places to do business.
Mr. Vinod Aggarwal, MD & CEO, VE Commercial Vehicles, said, the big push on infrastructure, with ₹12.2 lakh crore in capital spending, will keep demand strong for trucks, buses and logistics vehicles across the country. The creation of Rare Earth Mineral Corridors is a major step toward building a self-reliant EV supply chain by securing key materials for motors and advanced components. Continued duty benefits for battery manufacturing and EV technologies will help expand clean mobility and make electric vehicles more cost-efficient for wider adoption.
Mr. Ganesh Mani, CEO of Switch Mobility, said, the Budget marks a major step forward for electric commercial mobility. The ₹1,500-crore PM E-DRIVE push for e-buses and e-trucks, along with 4,000 e-buses planned for the Purvodaya States, shows that clean public transport is now a national priority. With duty exemptions on critical minerals and support for charging infrastructure, the government is strengthening the entire EV value chain. This Budget makes one thing clear: electrification in India has moved from pilot stage to a full-scale industrial shift, he added.
Dr. Sudhir Mehta, Founder and Chairman, EKA Mobility, said, the plan to deploy 4,000 electric buses across regions sends a strong signal of confidence in large-scale EV adoption and its role in easing congestion and cutting emissions. Major investments in high-speed rail corridors and freight routes will further improve intercity and tourism connectivity in a sustainable way. With higher public capital expenditure and better risk-mitigated financing, the Budget creates a strong foundation to accelerate electric mobility and low-carbon transport projects across the country.
Mr. Devndra Chawla, MD & CEO, GreenCell Mobility, said the decision to deploy 4,000 electric buses across the North-East is a major boost for public transport, especially in cities and tourism-heavy regions that need cleaner and more efficient mobility. The focus on new waterways, high-speed rail and dedicated freight corridors shows a shift toward low-emission, high-efficiency transport for both people and goods. The creation of an Infrastructure Risk Guarantee Fund will also help unlock private investment for EV fleets and charging networks.
Mr. Sanyam Gandhi, Whole-time Director, Chartered Speed, said, India’s infrastructure push with a major capex outlay of ₹12.2 lakh crore, will improve connectivity and mobility across the country. Its focus on cleaner transport, including the plan to deploy 4,000 electric buses in the Eastern region, shows a strong commitment to sustainable mobility. For operators like Chartered Speed, this direction aligns well with ongoing efforts to build safer and greener public transport systems.
“The Union Budget’s decision to promote the mining and research for Rare earth permanent magnets in India’s mineral-rich states is a positive development towards deepening India’s domestic capacity for rare earth sector. This is in line with India’s stated policy focus and growing adoption of EVs in India. Over time, today’s policy move is also expected to develop India as a globally competitive rare earth hub, weaning away India’s and global dependence on China. Today’ s announcement therefore will create the much needed capability and capacity in the upcoming years – that makes India self-reliant in critical component space for EV industry”, said Mr. Vikas Singh, MD, Greaves Electric Mobility.
Construction Equipment
Mr. Narinder Mittal, President & Managing Director, CNH India, said, new initiatives like the AI-based Bharat-VISTAAR platform, stronger irrigation networks, and support for high-value crops will help farmers increase productivity and income. The focus on customs duty reforms, easier business processes, and boosting manufacturing and exports strengthens India’s position as a global hub for advanced farm machinery. With the India–EU trade agreement, India can adopt modern technologies faster while creating new export opportunities for agricultural equipment.
Mr. Shalabh Chaturvedi, Managing Director, India & SAARC region, CASE Construction Equipment the Budget gives a big boost to infrastructure by raising public capital spending to ₹12.2 lakh crore, which will directly support India’s construction and equipment industry. The new Scheme for Enhancement of Construction and Infrastructure Equipment is a major step that encourages domestic manufacturing of advanced, high-value machinery. With plans for City Economic Regions, new freight corridors and expanded waterways, demand for modern construction equipment is set to grow strongly.
As per Mr. Deepak Shetty, MD & CEO JCB India, the focus on expanding manufacturing across key sectors and supporting MSMEs will strengthen domestic capability and make India a stronger global manufacturing hub. Big investments in infrastructure, including high-speed rail corridors, will boost connectivity and productivity.
Mr. Bhuvan Anandakrishnan, India Country Manager and Vice President, Caterpillar, said, there’s a strong signal of support for business growth by encouraging more private investment and boosting infrastructure and exports. Its push for digital transformation aligns well with Caterpillar’s focus on advanced, sustainable technologies. A stable and predictable policy environment will help industries plan better, stay resilient and drive long-term growth.
Dealers
Speaking on behalf of automotive dealers, Mr. C.S. Vigneshwar, President, Federation of Automobile Dealers Associations (FADA), said, the Union Budget gives a strong push to India’s shift towards clean and advanced mobility. Extending duty exemptions for lithium-ion cell manufacturing and developing Rare Earth Corridors will help strengthen the EV supply chain and make electric vehicles more affordable. The provision of 4,000 e-buses and support for greener fuels such as biogas-blended CNG further encourages sustainable transport. With new funding avenues for MSMEs and measures easing cash flow for dealers, the Budget supports both industry growth and consumer relief.
Aftermarket
Mr. S. Muralidharan, Chairman of Automotive Service Providers Academy (ASPA) said, “The 2026 Union Budget provides both continuity of major policies, as well as thrust to economic growth. Continuity is provided by investments in infrastructure, waterways, startups development, technology, semiconductors. Economic growth will come from increased focus on manufacturing, critical mineral unearthing, thereby ensuring resilient supply chains. Overall geographical development will happen with revitalising various areas like trekking, tourism etc across the country. A clear direction to make India globally competitive in light of various FTAs is seen.”
Component Makers
From the component manufacturers point of view, Mr Deepak Jain, Chairman, Lumax Group, viewed the Budget as strengthening India’s economic base with its continued focus on capital investment and support for MSMEs. The additional ₹4,000 crore for the Self Reliant India Fund and the plan to build ‘Champion MSMEs’ are welcome steps for the auto component ecosystem. Manufacturing and infrastructure push will help boost demand across the auto industry. The targeted duty exemptions for capital goods used in lithium-ion cell production also show the government’s commitment to clean mobility and advanced manufacturing. “We look forward to the detailed Budget documents for more clarity on duty changes and sector-specific measures,” he added.
Mr. Baba Kalyani, CMD, Bharat Forge Ltd said, with a renewed push on defence modernisation, semiconductor expansion, rare-earth corridors and green technologies, will strengthens India’s capability-building agenda. The continued focus on ease of doing business and IT-led growth creates a predictable environment for investors. Overall, the Budget gives industry the confidence to innovate, invest and support India’s journey toward a future-ready, globally competitive economy.
Mr. Arvind Chandra, Whole Time Director & CEO Tenneco India, said, the major boost in capital expenditure will help drive demand across the auto components sector, especially through improved highways and logistics networks. Continued focus on policy stability, exports and incentives for clean mobility — including EV and battery manufacturing — supports long-term investment. Overall, the Budget strengthens India’s journey toward advanced automotive engineering and a more sustainable mobility ecosystem.
Mr. S. Sunil Kumar, Country President, Henkel Adhesives Technologies India, said there is a strong push to infrastructure through ₹12.2 lakh crore of public capital spending. Investments in transport corridors, urban development, electronics, capital goods and semiconductors show the government’s intent to deepen India’s manufacturing strength. For the adhesives industry, this creates demand across construction, mobility and high-tech sectors where performance and durability matter. The Budget also highlights sustainability and digital manufacturing, reflecting a long-term growth path that supports innovation, resilience and competitiveness across the economy.
Dr. Raghupati Singhania, Chairman & Managing Director, JK Tyre & Industries, stated, the government’s large infrastructure outlay of over ₹12 lakh crore, along with a responsible fiscal deficit of 4.3%, sends a strong signal of stability and long-term confidence. Added support for the Self-Reliant India Fund will help MSMEs and strengthen the wider manufacturing ecosystem. For the auto and tyre industry, better infrastructure, logistics improvements and skill development will boost efficiency, demand and employment growth.
Mr. Dhaval Radia, Chief Financial Officer (India), ZEISS Group, said, the Budget offers much-needed stability at a time of global uncertainty, with strong focus on capital expenditure, infrastructure and fiscal discipline. These measures create a solid base for medium-term growth and investor confidence. However, India’s next wave of value creation will depend on improving the ease of doing business by addressing customs complexity, duty distortions and regulatory overlaps. A more predictable, simplified policy environment will be essential for attracting long-term investments and positioning India as a global leader in advanced manufacturing and technology.
Mr. Saugata Basuray, Interim CEO, Castrol India noted that there is strong emphasis on strengthening rural India, with initiatives for farmers, rural enterprises, women and young people, along with improved connectivity. These measures are aimed at lifting incomes and expanding economic opportunities beyond major cities. For the mobility sector, this matters because much of India’s everyday transportation needs come from rural and semi-urban markets.
Mr. Sidhartha Bhushan Khurana, Managing Director, STUDDS Accessories, by raising capital spending and developing City Economic Regions, strengthens infrastructure in Tier II and III cities, which are major drivers for the two-wheeler market. The new SME Growth Fund and mandatory TReDS adoption will ease liquidity challenges for small suppliers. With steps to link education with industry needs, the Budget supports both capability building and safer, more resilient mobility for the future.
Mr Vaibhav Kaushik, co-founder & CEO of Nawgati, said, the Union Budget takes a very practical approach by treating fuel and charging as one connected national network. Continued support for EV growth, digital payments and modern logistics can help fuel stations and charging points work more efficiently across cities and highways. What matters now is smooth execution, common standards and shared data systems so fleets can operate with less congestion and downtime. If done well, these steps will make mobility cleaner, faster and more efficient for everyone.
Mr. Saket Mehra, Partner, Grant Thornton Bharat, said, the Budget’s plan to build new industrial corridors in Odisha, Karnataka, Andhra Pradesh and Tamil Nadu is a strong step toward reducing India’s reliance on imported components for the EV sector. These corridors will help speed up the ₹7,280-crore programme announced last year to develop the entire value chain—from mining to advanced processing. This will strengthen domestic manufacturing and boost India’s ability to build EV technologies locally. Overall, it supports the country’s goal of creating a self-reliant and competitive clean-mobility ecosystem.
Mr. Harpreet Singh, Partner, Deloitte, said, the extension of customs duty exemptions on lithium-ion cells and other key inputs used for battery and EV manufacturing until March 2028 is an important step for the industry. This gives the EV ecosystem much-needed policy stability and helps bring down battery costs. By supporting domestic manufacturing across the value chain, the Budget strengthens India’s clean-energy transition and will help accelerate EV adoption across the country.
Mr. Jitin Makkar, Senior Vice President and Group Head, Corporate Ratings, ICRA, said, the Budget is neutral to slightly positive for the auto sector, especially after the recent GST rate cuts that lifted demand. Continued investment in rural infrastructure and farmer-focused schemes will help maintain purchasing power in rural markets, supporting two-wheelers, tractors and entry-level vehicles. Higher PLI support for the auto and component industry strengthens manufacturing competitiveness, while measures like PM E-Drive and rare-earth corridors will boost EV adoption and supply security. Liquidity support through TReDS is also a welcome step for MSME suppliers in the automotive value chain.
From CVs perspective Mr. Kinjal Shah, Senior Vice President & Co-Group Head, Corporate Ratings, ICRA, outlined the solid boost given to the CV market through a strong rise in infrastructure spending, with capex raised to ₹12.2 trillion for FY27. This will directly support demand for multi-axle trucks and tippers as construction and road projects expand. The government’s plan to procure more e-buses, including 4,000 units for Purvodaya tourism hubs, adds further momentum to electric public transport. Additional demand from Defence procurement of medium and heavy vehicles provides extra stability. Overall, the Budget supports electrification, capacity building and steady CV industry growth.
Mr. Narayan Subramaniam, CEO & Co-founder of Ultraviolette Automotive, said, “The Union Budget 2026 directly addresses critical supply-chain vulnerabilities while committing to long-term industrial resilience. The announcement of a rare earth mineral corridor is a strategic inflection point, one that positions India to play a defining role in the global energy and technology landscape. By enabling integrated development across mining, processing, and manufacturing, India is taking decisive steps to reduce import dependence and build enduring competitive advantage. Equally important is the doubling of the Auto PLI allocation, which sends a clear signal of intent. For the industry, this is the moment to align capital, innovation, and capacity expansion with India’s long-term vision. What will matter most now is policy consistency and strategic foresight. If this commitment is sustained, India can secure leadership not only in electric mobility, but across clean energy, aerospace, and advanced manufacturing.”