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2024 Budget Proposals For Automotive Sector – How They Impacted The Auto Industry?

Here are a few of the features that were introduced and shared during the budget announcement last year

With the upcoming budget just around the corner here is an update of all the major changes that were mentioned in the 2024 budget update. As of yet its expected that the new update would bring in more amendments that would enable easier production and manufacturing of goods related to EV Vehicles.

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Here are a few of the features that were introduced and shared during the budget announcement last year. One of the first changes that was prescribed by the Budget committee were

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Proposal To Extend Exemption Form BCD – The Following Goods Up To 31st March 2026.

The parts included in the exemption would include specified parts used in the production of Lithium Ion Cells and Lithium Ion Batteries And Battery Packs. Beyond that the exempted pool of goods included Brushless Direct Current ( BLDC) motors. All of these had been included keeping the improving pace of local battery production in perspective, another component that holds key importance in the battery production is the Input parts necessary for the manufacturing and production of Printed Circuit Board Assembly these were subject to exemption as well.

Beyond the above Proposal here is another proposal that was directed towards similar objectives

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Proposal To Exempt Critical Minerals From Custom Duties-

These included the following Antimony, beryllium, bismuth, cobalt, copper, gallium, germanium, hafnium, indium, lithium, molybdenum, niobium, nickel, potash, REE, rhenium, strontium, tantalum, tellurium,
tin, tungsten, vanadium, zirconium, selenium, cadmium, silicon other than quartz and silicon dioxide.

To Promote The Manufacturing Of Batteries In India And Encourage The PLI Scheme For The Production Of Advanced Chemistry Cell

The BCD Exemptions that were levied on the batteries of electrically operated vehicles were withdrawn. These included the batteries of electrically operated vehicles including two and three wheeled electric motors. The goods would as of now after the proposed changes would be subjected to BCD at the rate of 20%

Further a exemption of Customs Duty BCD and SWS on critical minerals necessary for the production of battery cells was also proposed.

Modifications in Certain Tariff entries Under The First Schedule To The Customs Tariff Act , 1975- Few of The Most Relevant Changes Were

A new Entry was proposed to have been inserted for lorries fitted with Bridging systems in CTH8705. The Tariff rate this change would adhere to would be around 10% Beyond that keeping the magnanimous shift to EV’s in mind a new entry was proposed for battery operated pedal assisted vehicle and e-bicycle in CTH87116080. Such a change would adhere to a tariff rate of around 100%

Beyond that to ease of the imports of tech related to battery production and other goods, a new change that allowed the imported to seek preferential duty benefit after declaration of origin was also proposed. To further reduce the blockage of working capital, the scope of obtaining lower deduction/ collection certificates widened to cover tax deduction at source on sale and purchase of sale of goods.

Impact Analysis

As per the following report by Saurabh Agarwal for EY The Automotive sector has been a key contributor to India’s economic growth. And as per the data the automotive sector contributes to about 49% to India’s manufacturing GDP. In Fy 2024 the country produced about a whopping 49 lakh passenger vehicles , 9.9 lakh three wheelers , 214.7 lakh Two Wheelers and 10.7 Lakh Commercial Vehicles.

The aim of the overall budget proposal was to push India from its current status to the world’s third largest automotive market. The last years budget played a key role in promoting the Aatm Nirbhar philosophy of the nation. It classified phased manufacturing programs as a catalyst for indigenous manufacturing upscaling and market penetration beyond the set horizons.

Also Read: OLA Gen 3 Scooters To Launch Today- Here’s Everything You Need To Know Before launch

ABOUT THE AUTHOR

Shriyansh Garg

Shriyansh Garg

Sub Editor

Shriyansh Garg is a Journalist with over three years of experience in the Media Industry. Over the years, he has covered and written on a wide range of topics ranging from automobiles and technology to travel. At News 24, he focuses on Tech And Automobiles. Being a passionate auto Enthusiast, Shriyansh finds ultimate solace in exploring the diverse facets of machines and their intrinsic nuances. He completed his Post-graduation in Media Studies in 2021, and since then, he has been able to harness his writing skills and acumen to deliver quality content for brands like Trade India, Bharat Arpanet, and several others. As an Integral part of the English Digital Team at News 24 he applies his best writing capabilities for covering tech and auto-related news updates

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First published on: Jan 31, 2025 11:26 AM IST


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