As India heads toward the Union Budget 2026, leaders from the automobile industry are calling for supportive and predictable government policies to drive sustainable growth and improve ease of doing business. Stakeholders across dealerships and consulting firms have highlighted specific areas where targeted policy intervention could meaningfully strengthen the sector.
Dealership challenges and regulatory simplification
Vivek Datta, MD and CEO, Globe Toyota, JCBL Group, highlights that auto dealerships in states such as Haryana and Punjab continue to face operational hurdles due to complex and time-consuming regulatory processes. He notes that simplifying compliance norms is essential for dealerships selling petrol, diesel and hybrid passenger vehicles, enabling smoother operations and greater confidence to invest in newer technologies.
Hybrids as a bridge to sustainable mobility
Datta also underscores the strategic role of hybrid vehicles in India’s transition to cleaner mobility. According to him, hybrids offer a practical and environmentally responsible solution for a developing economy. He advocates stronger policy support through incentives, tax benefits and streamlined regulations to encourage adoption, reduce emissions and support long-term sustainable growth. He adds that focused incentives for hybrids would expand consumer choice while helping dealerships align with national environmental goals.
GST reforms, EV incentives and R&D focus
From a broader policy standpoint, Subhabrata Sengupta, Partner at Avalon Consulting, says GST reforms have already provided a significant boost to the auto sector. He points to ongoing discussions around extending production-linked incentive schemes, EV subsidies and investments in charging infrastructure, with an added emphasis on vehicle scrappage. Sengupta also calls for higher budgetary allocations for electric buses to modernise fleets and accelerate electrification of public transport. Additionally, he stresses the importance of incentivising research and development, noting that Indian auto companies must evolve from manufacturing to technology ownership.
Government support and the road ahead
Industry leaders broadly agree that consistent government backing for both hybrid and electric vehicles will be critical in shaping the next phase of growth. Fiscal measures such as tax incentives, PLI schemes and infrastructure investment are seen as key levers to accelerate cleaner mobility adoption and enhance India’s global competitiveness in auto manufacturing.
As Budget 2026 approaches, experts believe that regulatory simplification, targeted incentives and sustained investment in public transport and innovation will be central to addressing current challenges and building a more sustainable automotive future.
