Auto bodies laud increased tax exemption limit, EV push and rural focus in Budget 2025-26; ACMA and FADA chiefs see strong boost to vehicle demand across segments
01 Feb 2025 | 4031 Views | By Sarthak Mahajan
Leading automotive industry associations have welcomed the Union Budget 2025-26, describing it as progressive and growth-oriented, with strong potential to boost vehicle sales across segments through increased consumer spending power and manufacturing support.
The Automotive Component Manufacturers Association (ACMA) and Federation of Automobile Dealers Associations (FADA) both emphasized how ...
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Leading automotive industry associations have welcomed the Union Budget 2025-26, describing it as progressive and growth-oriented, with strong potential to boost vehicle sales across segments through increased consumer spending power and manufacturing support.
The Automotive Component Manufacturers Association (ACMA) and Federation of Automobile Dealers Associations (FADA) both emphasized how the budget's focus on middle-class tax relief, rural prosperity, and manufacturing sector support would benefit the automotive sector.
ACMA President Shradha Suri Marwah praised the budget's forward-looking approach, particularly highlighting its emphasis on strengthening manufacturing and clean mobility. "The Union Budget 2025-26 is forward-looking and growth-centric, reinforcing the government's commitment to strengthening India's manufacturing sector and driving the transition to cleaner mobility solutions," she said. Marwah added that the proposals for personal income tax would boost consumption by putting more money in people's hands.
FADA President C S Vigneshwar expressed optimism about the budget's impact on auto retail sales. "The Union Budget 2025-26 is a well-balanced and growth-oriented budget that prioritizes middle-class spending, rural prosperity, and MSME empowerment," he stated. According to Vigneshwar, the increased income tax exemption limit to ₹12 lakh would directly stimulate demand across vehicle segments.
Both associations particularly welcomed the budget's focus on EV manufacturing and clean mobility. ACMA appreciated the customs duty exemption on capital goods for EV battery manufacturing, while FADA noted that the National Manufacturing Mission and clean mobility infrastructure incentives would accelerate EV sector growth.
The MSME sector, crucial for both auto components and dealerships, received significant attention in the budget. ACMA highlighted the increase in credit guarantee cover from ₹5 crore to ₹10 crore as a positive step for technology investments and R&D. FADA emphasized how enhanced MSME support would encourage the expansion of auto dealerships and fleet businesses.
Rural initiatives in the budget, including the Dhan-Dhaanya Krishi Yojana and increased Kisan Credit Card limits, were seen as potential drivers for rural vehicle demand. FADA predicted these measures would boost sales of tractors, small commercial vehicles, and two-wheelers in rural markets.
The auto component industry's export competitiveness is expected to improve with the introduction of Bharat Trade Net and the Export Promotion Mission. ACMA welcomed these initiatives, noting they would help integrate India's auto component sector into global supply chains.
The combined response from both associations indicates strong industry confidence in the budget's potential to drive growth across the automotive sector, from manufacturing and exports to retail sales and electric mobility adoption.