Auto Sector Reacts to Budget 2026–27 Focus on EVs and Infrastructure

By Jony Shekhawat | Published Date : February 03, 2026

Industry leaders say Budget 2026–27 gives long-term direction on infrastructure, EVs, and manufacturing, even as short-term demand challenges remain.

Union Budget 2026–27 has come at a time when the auto industry is not fully comfortable. Some vehicle segments are slow, costs are still high and the EV truck market is moving very fast. Because of this, the budget was watched closely by manufacturers. Many industry leaders feel the budget does not give instant relief, but it gives direction for the next few years.

Infrastructure Push Gives Confidence to Vehicle Makers

Table of Contents

1. Infrastructure Push Gives Confidence to Vehicle Makers

2. Manufacturing and Supply Chain Still a Key Topic

3. EV Companies Feel the Budget Is Supportive

4. E-Buses Seen as a Practical Step, Not Just Talk

5. MSME Support Gets Quiet Approval

6. Tech and Semiconductors Matter More Than Before

7. Budget Sends Signal, Execution Is the Real Test

Read More: Eicher Pro X EV Completes Kashmir to Kanyakumari Trip

One thing most companies agreed on is infrastructure spending. Higher capital expenditure and focus on roads, freight corridors, railways and waterways is seen as a positive step.

Auto makers say when infrastructure work improves, vehicle demand follows with some delay. Freight movement increases, logistics become smoother and commercial trucks slowly come back.

Manufacturing and Supply Chain Still a Key Topic

The budget has talked about domestic manufacturing, electronic components, rare earth processing and tool rooms. For the auto industry, this is important because supply chain issues have been a problem in recent years.

Industry executives feel that if these plans move on the ground, dependence on imports can be reduced. This can help Indian manufacturers control costs and improve export competitiveness.

EV Companies Feel the Budget Is Supportive

Electric vehicle players sounded more positive after the budget. Continued duty relief on lithium-ion battery parts and capital goods has been welcomed. Companies believe this will help keep EV costs under control.

Some EV makers said these steps will help them expand beyond big cities. Tier-2 and Tier-3 markets are becoming important, but cost pressure is always there.

E-Buses Seen as a Practical Step, Not Just Talk

The announcement around the deployment of 4,000 electric buses got attention from the mobility industry. Large public transport orders are seen as a practical push, not just policy talk.
Industry people say public buses play a big role in building confidence around electric mobility. Once fleets start running at scale, suppliers, charging partners and service players also grow.

MSME Support Gets Quiet Approval

Support for MSMEs through growth funds, easier credit and better payment systems did not make big headlines, but industry leaders say it matters. Small suppliers form the backbone of the auto ecosystem. Better cash flow and financing can reduce stress at the lower end of the supply chain.

Tech and Semiconductors Matter More Than Before

The budget’s focus on technology infrastructure and semiconductors was also noted. Auto companies today depend heavily on electronics, software and chips. Industry experts feel this is not about today or tomorrow, but about building capability for future vehicles, especially EVs and connected mobility.

Budget Sends Signal, Execution Is the Real Test

Overall, the industry feels Budget 2026–27 sends the right signals, but results will depend on execution. There is no overnight boost, but there is clarity. Auto makers believe if infrastructure spending continues, EV policies remain stable and manufacturing support reaches the ground level, the sector can move on a steady path.

Also Read: Budget 2026–27 May Slowly Push Truck and CV Demand

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Frequently Asked Questions on Commercial Vehicles

Q1. How does infrastructure spending impact commercial truck demand?

Ans. Better roads, freight corridors, and logistics projects increase freight movement. This usually leads to higher demand for commercial trucks over time, especially in construction and mining segments.

Q2. Are fleet owners shifting towards new commercial trucks in India?

Ans. Yes, many fleet owners are replacing older trucks due to rising maintenance costs, fuel efficiency concerns, and stricter emission norms, leading to gradual replacement demand.

Q3. What role do electric trucks play in India’s commercial vehicle market?

Ans. Electric trucks are mainly being tested for short-distance and city logistics. While volumes are still low, interest is growing due to lower running costs and emission benefits.

Q4. Which factors influence buying decisions for commercial truck buyers?

Ans. Key factors include mileage, maintenance cost, load capacity, service network, resale value, and availability of financing options.

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