The Union Budget 2025-26 is a well-balanced and growth-oriented budget that prioritizes middle-class spending, rural prosperity, and MSME empowerment. The increase in the income tax exemption limit to ₹12 lakh will directly boost demand for two-wheelers, passenger vehicles, and EVs, as consumers have more disposable income to upgrade their vehicles.
For the rural economy, the Dhan Dhanya Krishi Yojana, benefiting 1.7 crore farmers, along with the Kisan Credit Card loan limit expansion, will drive demand for tractors, small commercial vehicles, and two-wheelers. MSMEs, which form the backbone of the economy, are set to thrive with higher credit limits, enhanced fund-of-funds for startups, and new financing options—a move that will also encourage the expansion of auto dealerships and fleet businesses.
The National Manufacturing Mission and incentives for solar, EV batteries, and clean mobility infrastructure will accelerate the growth of the EV sector while making India a global hub for sustainable mobility. Additionally, the increase in FDI for insurance to 100% will bring more competition and innovative financing options for auto buyers, further stimulating demand.
FADA welcomes this progressive budget, which will fuel India’s auto retail sector across rural, urban, and electric vehicle segments, supporting the vision of ‘Viksit Bharat’ and sustainable mobility. – Mr C S Vigneshwar, President – Federation of Automobile Dealers Association (FADA).