As Budget 2025 is around the corner, every business sector in India looks forward to having some of that halwa Finance Minister Nirmala Sitaraman shared with her colleagues as a part of the ceremony. The hopes are high for the Indian automotive sector. According to Market Research Future, the Indian automotive sector is expected to grow at a CAGR of 8.80 percent, from $ 109.3 billion in 2023 to $ 214.7 billion by 2032. To keep the sector’s engine running successfully, industry experts have called for more foreign investments and, particularly, focused efforts to support local manufacturing. Although it has been progressive so far, the industry still faces a slowdown in areas such as commercial and passenger car segments.

Leaders Want Policies that Promote Business-friendly Environment and Sustainable Mobility

Narain Karthikeyan, Founder of DriveX, said, "With the Union Budget on the horizon, we look forward to forward-thinking policies that promote affordability, a business-friendly environment, and sustainable mobility.”

Long-term Policy Continuity Could Fulfill EV Industry Needs

The PM e-Drive initiative offers a Rs.5000/kWh subsidy, with a maximum of Rs.10,000 per unit. Leaders believe a maximum discount of Rs.10,000 could be applied to purchasing electric two-wheelers with premium batteries. That is, assuming the car was registered within the 2024–2025 fiscal year. 

At the same time, they pointed out that such incentives may not make up for the boost the EV industry needs. Manufacturers are therefore aiming for long-term policy continuity.

Reduction on GST for EVs, Components and Charging Infrastructure

Narain says, “To begin with, we're seeing rural demand pick up for auto while urban demand is slowing."

Word has spread to the government’s ears on the growing taxation problems with E4W batteries and charging points. Industry experts voiced that a five percent GST on EVs, parts, and charging infrastructure could be essential. However, they remarked that there is virtually little probability that GST rates will be lowered in any way.

Narain suggested that a friendlier tax regime to boost disposable income in urban areas would be a good start. 

“To make affordable mobility a reality for middle- and lower-income groups, targeted initiatives like interest subsidies on refurbished vehicle loans, and lowering GST on refurbished vehicles would be highly beneficial while reinforcing the circular economy”, he denotes.

 

Two Ways to Make People Opt for More EVs

Particularly for EVs, industry experts came down to two important steps to encourage the use of these vehicles. One is the standardization of charging procedures for all products, and the other is funding the development of charging infrastructure in collaboration with the energy and petroleum industries.

How Innovation and Growth Can Be Boosted

According to Narain, easing compliance norms and offering financial support for automotive and tech startups will encourage innovation and growth. Creating favorable policies like PLI schemes for businesses operating in unorganized sectors is one direction. Providing incentives for startups expanding into Tier 2 and Tier 3 cities, along with subsidies for rural mobility solutions, can also drive economic inclusivity.

He further went on to say that “fostering job creation through skill development programs for refurbishment professionals and recognizing gig workers’ contributions will uplift the workforce.” 

Narain adds, “A budget that prioritizes green technology, digital advancements, and pro-business reforms will not only boost India’s automotive sector but also make mobility more inclusive and sustainable for all.”

Coming to the Drone Industry

“India has the opportunity to leverage its domestic consumption and global reputation as a trustworthy technology partner built by the IT sector to evolve into a global drone hub,” says Sai Pattabiram, Founder & MD, Zuppa Geo Navigations Pvt Ltd.

The nation’s pursuit of assembling a formidable aerial arsenal lies at the very disposal of its existing and growing domestic industry. In realizing this ambition, companies like Garuda Aerospace, IdeaForge, and Dhaksha Unmanned Systems are upholding pride in making remarkable progress in India’s air defense technology for a range of uses, such as logistics, agriculture, and surveillance. There are also hefty sums of money being invested in UAV technology by companies like Larsen & Toubro (L&T) and Hindustan Aeronautics Limited (HAL), ascending to various levels of sharpening their expertise in aerospace and defense. Further amplifying these efforts is the government's powerhouse R&D arm, the Defense Research and Development Organization (DRDO).

All Rage on a New PLI Scheme to Boost Domestic Production

Firstly, in September 2021, the PLI drone scheme was rolled out with a three-year initial funding allocation of Rs. 120 crore. Enhancing drone production, creating components, and assisting with software development were among its objectives. It also promised to lessen reliance on imports and encourage domestic drone manufacturing. But to realize its full potential, industry leaders have called for a significant boost in funding.

Therefore, today, the rage is all over a new Production-Linked Incentive (PLI) scheme that leaders anticipate in the upcoming Union Budget 2025–2026. This scheme is believed to contribute to drone technology, boost domestic production, and lessen dependency on imports. It is said to encourage a plethora of services in addition to manufacturing incentives. These include selling software for Unmanned Aircraft Systems (UAS), leasing drones, and domestic coding.

That’s not all! There is another potential promising progress for the nation, and that is in the market for drone cybersecurity. 

Drone Cybersecurity - A Great Opportunity

This market is already growing at a rapid pace mostly due to demands of drones in a variety of industries, including defense, logistics, and agriculture. Strong cybersecurity measures are now essential as businesses use drone technology to increase productivity and operational capabilities.

Industry experts such as Pattabiram have shed light on this market by saying, “Drone cybersecurity is turning out to be an absolute must-have for India in particular and global users in general, especially after the often quoted electronic warfare threats in Ukraine and the Hezbollah pager attack in Lebanon.

He believes that, “The government should recognize this huge National as well as global opportunity and support companies involved in Component manufacturing, Cyber , Data Security  and analysis  for drones”. 

Suggestions Narrowed Down to Moving Deeper in Component Level Supply Chain

Pattabiram also acknowledged that “The demand for secure non-Chinese drones is growing the world over and more so in India.

Drones are vulnerable to manipulation due to the off-the-shelf (COTS) components, in which Chinese autopilots essentially carry open-source frameworks. This weakens the access to their code, which are largely and openly accessible on websites such as GitHub, making it easier for hackers to exploit these systems.

From his opinion, he suggested that, “This can only be achieved by India moving deeper into the component level supply chain from the current assembly of imported components level that it is in today.”