Budget 2023 – 2024: Key highlights regarding Auto Sector

Finance Minister Nirmala Sitharaman presents Union Budget 2023.

Finance Minister Nirmala Sitharaman presents Union Budget 2023 

The Union Budget 2023 announcements made for Auto Sector are as follows: 

1)  The Union Budget 2023 eliminates customs duty on capital goods/machinery used in the manufacture of lithium-ion cells for use in batteries of electrically operated vehicles (EVs). The move is expected to help reduce the cost of electric vehicles in the country. 

2) Finance Minister Nirmala Sitharaman said, “To further provide impetus to green mobility, customs duty exemption is being extended to import of capital goods and machinery required for the manufacture of lithium-ion cells for batteries used in electric vehicles." 

3) “The recently launched National Green Hydrogen Mission with an outlay of 19,700 crore will facilitate the transition of the economy to low carbon intensity and reduce dependents on fossil fuel imports”, FM Nirmala Sitharaman announces. 

4) A scheme to scrap old vehicles has been announced to replace polluting vehicles. States are expected to announce a similar programme to replace ageing vehicles and ambulances.  

5) The domestic automotive industry has experienced a healthy revival in the current fiscal year, aided by economic activity recovery and increased mobility. ICRA anticipates that the government will maintain its emphasis on green mobility, infrastructure projects and job creation in the upcoming budget. 

The automotive industry contributes significantly to India's manufacturing sector, employing approximately 34-37 million people directly and indirectly. BSE Auto Index was up more than 27 per cent from the previous Union Budget to today's budget and it was up more than 1 per cent in the previous six months. 

BSE Auto Index was trading lower, down 0.88 per cent at a level of 30,185.07 on Wednesday whereas the Indian benchmark indices were also trading higher. Top Auto stocks were UNO Minda Ltd (up 2.85 per cent), Bal Krishna Industries Ltd (up 1.51 per cent) and MRF Ltd (up 1.20 per cent).