Madhya Pradesh Automobile Sector Awaits Union Budget 2026 for Demand Revival
Automobile dealers and manufacturers across Madhya Pradesh are expressing cautious optimism as they look toward the upcoming Union Budget 2026, scheduled for presentation on February 1. The industry is seeking comprehensive measures to stimulate demand across various segments, including passenger vehicles, two-wheelers, and the rapidly evolving electric mobility sector.
Uneven Sales Momentum Spurs Calls for Policy Intervention
Dealers have reported inconsistent sales performance over the past year, with particular softness observed in entry-level cars, two-wheelers, and electric vehicles. This uneven momentum has created a sense of urgency for policy support aimed at enhancing affordability and encouraging consumer spending.
Ashish Pande, Chairperson of the Madhya Pradesh Federation of Automobile Dealers Associations (FADA), emphasized the need for decisive action. "A substantial push is essential to rejuvenate automobile sales, especially in segments where demand has remained subdued. Dealers nationwide anticipate the Budget will tackle affordability challenges through tax relief measures, simplified financing options, and sustained policy backing for electric mobility," he stated.
Key Expectations from the Automotive Industry
The industry's wishlist for Budget 2026 includes several targeted initiatives:
- Interest subvention schemes to reduce borrowing costs for consumers
- Rural-focused incentives to tap into agricultural and semi-urban markets
- GST rationalisation for electric vehicle charging services
- Extension of concessional tax rates for hybrid vehicles
- Continuation of EV incentive programs like PM E-DRIVE or FAME beyond March 2026
- Duty exemptions on critical components, particularly batteries
Addressing Affordability and Purchasing Power Concerns
Aditya Kasliwal, an automobile dealer, highlighted the importance of improving middle-class purchasing power. "Reducing interest rates, enhancing auto loan availability, and implementing supportive credit policies would directly impact showroom footfalls and conversion rates," he explained.
Dealers also advocate for Budget provisions supporting vehicle scrappage through rebates or GST credits on new purchases. Additionally, they seek rationalisation of customs duties in the premium segment, where imported vehicles currently face duties ranging from 70 to 110 percent.
State-Level Taxation Challenges in Madhya Pradesh
Praveen Patel, an automobile dealer based in Indore, pointed out that state-level taxation significantly affects vehicle affordability. "Reducing RTO taxes on cars would lower on-road prices substantially. Furthermore, the high GST rates on CNG vehicles and related components in Madhya Pradesh negatively impact customer affordability and operational expenses," he noted.
Strengthening Madhya Pradesh's Automotive Hub Status
Industry representatives believe that a stable tax environment combined with targeted incentives would not only sustain recovery but also strengthen rural demand. Such measures would reinforce Madhya Pradesh's position as a significant automobile manufacturing and retail center in 2026 and beyond.
The automotive sector's collective hope is that Budget 2026 will deliver a balanced package of fiscal support and regulatory clarity, enabling a robust revival across all vehicle segments while accelerating India's transition toward sustainable mobility solutions.
