In a move that could redefine India’s mobility landscape, the Union Budget 2025 has set the stage for an electric vehicle (EV) revolution with its bold emphasis on local manufacturing, customs duty exemptions, and sustainability. The mobility sector in India is bound to experience a reformation with the new budget. Industry leaders have commented on this change claiming, ‘This is a breath of fresh air promoting sustainability.’
Battery Cost Reduction While Producing Locally – A New Angle to the Initiative
One of the most effective contours is removing customs duty on lithium-ion batteries. This move will target one of the most significant confines to the Revolution, the cost of the E-Bike – batteries. For consumers dreaming of owning an electric vehicle but deregulated by the stubbornly high prices, this might be the golden opportunity.
Dinesh Arjun, co-founder and chief executive officer of Raptee, celebrated the action saying, “That is a major leap forward.” He further noted that powering clean energy vehicles will be economical all around with investments in domestic battery manufacturing. Additionally, as the cost of batteries lower, we will not only witness decreased prices for EVs, but also improved investments in native battery production.
But there is more, the government has expanded the list of capital goods subject to customs tax exemption to further nurture local capabilities. Manufacturers now have access to 35 more capital goods for production of EV batteries and 28 more for production of mobile phone batteries. All this is part of an aggressive multi-pronged effort to make India a center for the advanced battery industry.
“This isn’t just about cutting costs, it’s about creating opportunities,” said Shreyas Shibulal, Founder and Chief Executive Officer of Numeros Motors. By shifting production to the local market, we are creating highly skilled jobs and driving new ideas.
The Vision of a Circular Economy – Greener Tomorrow Through Battery Recycling

Addressing the over-reliance on imports through recycling will facilitate growth in the manufacturing sector even as the changes proposed in the budget tackles that challenge head-on. The government seeks to achieve its circular economy vision of turning battery waste into wealth by enabling economical processing of battery scrap.
Utkarsh Singh, Co-founder & CEO of BatX Energies, appreciates this move by the government and said, This captures the Make in India spirit and places us at the forefront of sustainable technologies across the world. With the approval of the Critical Mineral Mission, India is set to become self-sufficient in the procurement of crucial minerals such as cobalt, lithium, and zinc.
Sudhir Mehta, Founder and Chairman of EKA Mobility, added to this view by pointing out how the exemption on 12 key minerals, including cobalt powder, and lithium-ion battery waste, will strengthen India’s cleantech ecosystem. These measures are not meant for contemporary requirements only. They promise sustenance in the future as well, he said.
Changing Lanes – From FAME to PM E-DRIVE

Another measure of great importance under Budget 2025 is the scrapping of the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme. As a replacement, the government has launched the PM Electric Drive Revolution In Innovative Vehicle Enhancement (PM E-DRIVE) Scheme with a budget of Rs 4,000 crore to boost electric vehicle deployment.
Transitioning into sharper focus is how industry insiders perceived this change. An outsider to the industry noted, “It is my opinion we were set for the gradual elimination of the FAME scheme. But, the phase E-DRIVE aids us implementation wise.”
Kearney partner Mishra Rahal maintained that the new scheme seems to be a deeper buck change. “Expenditure on having to support agriculture, rural development, and MSMEs will cater to higher consumption for mass market two wheelers and vehicles,” he said.
What Does This Mean for You?
The consequences are tremendous for India and the Indian middle class in particular. Because of fewer EV batteries and added domestic production, electric vehicles can even during premium pricing become the norm in the households of the middle class. Not to mention the consideration for promising minimal environmental impacts from battery recycling laws matches perfectly with the progressive net-zero initiatives of the country.
After Budget 2025, it is indisputable India’s electric vehicle sector has moved from the passenger side to the driver’s. The policies set out to boost local sourcing over imports and ecosystem sustainability gives India’s EV industry a head start.
So, get ready to head to the future of mobility where it is not only electric, but also made in India.