2011 Union Budget Highlights on Auto Industry

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  • The 2011 Union Budget was creating a big fear among the auto manufactures on Exercise duty but there was no change in excise duties which comes as a relief to the auto sector. This means excise duty on small cars remains at 10%, large cars and SUVs continue to attract 22% excise duty. 


  • In a decidedly eco-friendly step, the minister proposed the setting up of a national mission on hybrid vehicles and electric vehicle (EV) as well as special incentives for hybrids if made in India. The announcements made in the Budget are aimed at making Electric and Hybrid technology cheaper and popular in India. Hybrid cars manufactured in India will see a excise duty reduction of 5 percent. We expect that the global manufactures to bring their hybrid vehicles into India. 


  • Full exemption from basic customs duty and a concessional rate of Central Excise Duty extended to batteries imported by EV manufacturers. So for Pure EV and Hybrid vehicles manufactures this could bring down the cost of production.


  • Excise duty on LEDs reduced to 5% which should encourage automakers to adopt this technology. Even for the Mid-size vehicles manufactures may consider this technology.


  • Concessional Excise Duty of 10% to vehicles based on fuel cell technology.  


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