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India Budget Prioritizes Battery Tech & Local EV Manufacturing

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  Published in Automotive and Transportation on Saturday, January 17th 2026 at 15:23 GMT by Zee Business

Beyond Incentives: Focusing on Battery Technology and Localization

A key area of anticipated investment is battery technology. The widespread adoption of EVs is inextricably linked to advancements in battery performance, cost, and safety. The budget is expected to incentivize Research and Development (R&D) specifically targeted at improving battery energy density, extending range, and reducing charging times. Furthermore, fostering local battery manufacturing capabilities will be crucial to reduce reliance on imports and bolster India's domestic EV supply chain. This localization strategy extends beyond batteries, encompassing a broader push for domestic production of EV components, from motors and controllers to charging infrastructure.

Mohit Gang, Partner at Deloitte India, succinctly summarizes the expected direction: "Given the increased focus on EVs, we can expect the budget to provide a detailed roadmap for the EV sector, including incentives for EV adoption, investment in charging infrastructure, and measures to promote the local manufacturing of EV components." This roadmap likely involves phased incentives, potentially tiered based on battery localization or performance metrics, to encourage continuous improvement and innovation.

Expanding the Horizon: Green Hydrogen and Biofuels Join the Equation

The budget's focus isn't solely on EVs. Recognizing that a truly sustainable transportation system requires a multifaceted approach, Deloitte anticipates strong support for alternative fuels like green hydrogen and biofuels. These fuels offer the potential to decarbonize sectors beyond passenger vehicles, including heavy-duty transport and aviation. The budget is likely to include incentives for developing the necessary infrastructure - production plants, storage facilities, and distribution networks - along with measures to promote their adoption within the transportation sector. This move aligns with India's broader commitment to reduce its dependence on fossil fuels and explore cleaner energy alternatives. For example, policies could be introduced to encourage the use of biofuels in existing diesel engines, providing a bridge towards a fully decarbonized transportation system.

Deloitte India's Key Recommendations - A Summary

Here's a breakdown of Deloitte India's key recommendations for the Union Budget 2026, underscoring the anticipated priorities:

• Refined EV Incentives: Moving beyond blanket subsidies to more targeted incentives that promote wider adoption and strategic technological advancements.
• Accelerated R&D: Significant investment in R&D focused on battery technology, charging infrastructure, and novel clean mobility solutions.
• Localized Manufacturing: Policies that incentivize and support the domestic production of EV components, strengthening India's supply chain resilience.
• Expanded Charging Infrastructure: Addressing range anxiety by aggressively expanding the availability and accessibility of charging stations across the country.
• Alternative Fuel Support: Incentives to drive the development and adoption of green hydrogen and biofuel infrastructure and usage.

Looking Ahead: A Sustainable Transportation Ecosystem

The Union Budget 2026 presents a critical opportunity to solidify India's position as a leader in sustainable transportation. By embracing the recommendations outlined by Deloitte India, and focusing on innovation, localization, and a diversified approach to clean mobility, the government can pave the way for a cleaner, more efficient, and economically vibrant future for India.