Strategic Analysis: Auto Sector Priorities for India's 2026-27 Union Budget
As India prepares for the Union Budget 2026-27, the automotive industry emerges with strategic priorities shaped by recent policy developments. The 2025-26 financial year has seen significant momentum through revised GST rates on vehicles and landmark free trade agreements with the United Kingdom and European Union, creating favorable conditions for sector growth. Industry leaders, consulted by Autocar Professional, emphasize sustained support for domestic manufacturing and enhanced road infrastructure allocation as critical components for maintaining competitive advantage. Analysis indicates potential policy measures including GST reductions for electric vehicle repairs and targeted concessions for component manufacturers, as highlighted in recent EY reports. Piyush Arora, Managing Director and CEO of Skoda Auto Volkswagen India, underscores the necessity of consistent backing for local production capabilities. The anticipated next phase of customs reforms presents an opportunity to streamline operations and strengthen India's position in global automotive supply chains. These expectations reflect a mature industry seeking policy continuity while advocating for structural improvements that align with broader economic objectives.
