Budget 2025 promotes manufacturing with a ‘Make in India’ focus

By Staff Report February 3, 2025 7:07 pm IST

The Union Minister for Finance and Corporate Affairs, Nirmala Sitharaman, presented the Union Budget 2025-26 in Parliament, focusing on the ‘Made in India’ which strengthens domestic manufacturing with the National Manufacturing Mission, MSME support, EV battery incentives, and skilling initiatives.

Union Minister for Finance and Corporate Affairs Nirmala Sitharaman presented the Union Budget 2025-26 in the Parliament. Sitharaman focuses on the ‘Made in India’ brand, a new scheme for 5 lakh women, scheduled castes and tribes, and first-time entrepreneurs.    

Sitharaman announced that the Government will set up a National Manufacturing Mission covering small, medium and large industries for furthering “Make in India”. The government will also implement a scheme to make India a global hub for toys representing the brand. She added to help MSMEs achieve higher efficiencies of scale, technological upgradation and better access to capital, the investment and turnover limits for classification of all MSMEs enhanced to 2.5 and 2 times, respectively.

The establishment of the National Manufacturing Mission is a significant boost to the entire Make in India initiative. Lajpat Yadav, COO- of India Welding Business, Ador says it’s a commendable move that will accelerate growth in the welding and manufacturing sectors. Another crucial aspect is the commitment to climate-friendly development and clean technology manufacturing—an urgent need of the hour and a step in the right direction. As industries, we have a key role in environmental protection. Additionally, the announcement of a National Skilling Center to enhance workforce capabilities in the manufacturing sector is another positive step. With these initiatives, India will soon become a global manufacturing hub, driving innovation, sustainability, and economic growth.

The Finance Minister also announced the launch of a new scheme for 5 lakh women, Scheduled Castes and Scheduled Tribes first-time entrepreneurs. This will provide term loans up to Rs. 2 crore during the next 5 years.

The FM presented the Union Budget 2025-26 with the theme “Sabka Vikas” stimulating balanced growth of all regions. In line with this theme, the Finance Minister drafted the broad Principles of Viksit Bharat to encompass growth, secure inclusive development, invigorate private sector investments, uplift household sentiments, and enhance the spending power of India’s rising middle class, focusing on the poor, youth, farmers, and women.

The Union Budget highlights that Agriculture as the first ENGINE, MSMEs as the 2ND, Investment as the 3rd Engine, and exports as the 4th are the engines in the journey to Viksit Bharat using reforms as fuel, guided by the spirit of inclusivity.

Manufacturing announcements made by FM

Lithium-ion battery

Nirmala Sitharaman announced the inclusion of 35 additional capital goods for EV battery manufacturing and 28 additional capital goods for mobile phone battery manufacturing. This will boost domestic manufacture of lithium-ion batteries for mobile phones and electric vehicles.

Shivam Narang, Managing Director, Khalsa E-Vehicles Pvt. Ltd shares “The Union Budget 2025 laid a strong foundation for India’s EV future. The focus on grid-scale batteries will help stabilise the renewable energy grid, ensuring that EVs can be powered by clean energy sources. The exemption of basic customs duty on lithium-ion battery scrap is another commendable move. It promotes a circular economy by making battery recycling more viable, reducing reliance on fresh raw material imports, and decreasing production costs and environmental impact.”

The government also proposed a full exemption on cobalt powder and waste, the scrap of lithium-ion batteries, lead, zinc and 12 more minerals. This will help secure their availability for manufacturing in India and promote more jobs for our youth.

Shipping

“I also propose the same dispensation for shipbreaking to make it more competitive,” Nirmala Sitharman said. The government proposes to continue the exemption of BCD on raw materials, components, consumables or parts for the manufacture of ships for another ten years.

Electronic

“To further boost the manufacture of such Open Cells, the BCD on these parts will now stand exempted,” she said.

The government proposes raising the BCD on Interactive Flat Panel Display (IFPD) from 10 per cent to 20 per cent and reducing the BCD to 5 per cent on Open Cell and other components.

Ashish P. Dhakan, MD & CEO, Prama Hikvision India Pvt. Ltd adds, “We welcome the progressive Union Budget 2025-2026. The Union Budget has sparked interest in the video security industry and its key stakeholders. The key announcements and provisions relevant to the video security industry are getting positive feedback.”

The budget proposes establishing a Centre of Excellence in Artificial Intelligence for education, with an outlay of ₹500 crore. This initiative could have positive implications for AI-powered video security solutions. The Union Budget aims to boost domestic semiconductor manufacturing through incentives and investments. This could lead to advancements in video security technology, such as improved camera sensors and processing capabilities. The budget proposes exempting customs duties on critical minerals, including lithium-ion battery scrap, which could benefit the manufacturing of security devices. The budget plans to expand broadband connectivity to rural schools and health centres, which could create new opportunities for video security solutions in these areas. The incentives for ‘Make-in-India’ initiatives can help the electronic security industry to expand and grow further.

Defence

Union Budget 2025: FM Sitharaman presented the Union Budget 2025, allocating over ₹6.8 lakh crore for defence, including ₹1.8 lakh crore for military modernisation. This marks a 9% increase from last year, aiming to boost India’s military capabilities and self-reliance.

S Sunil Kumar, Country President, Henkel Adhesive Technologies India adds, “The rationalisation of customs tariffs will enhance India’s global competitiveness, particularly benefiting manufacturers, while the focus on MSMEs—crucial contributors to India’s GDP and exports—will empower them to diversify offerings and expand internationally. The strategic and forward-thinking approach fosters a pro-business environment that encourages both FDI and domestic investment.”

The ambitious 100 GW nuclear target represents a bold commitment to sustainable growth, driving investments in infrastructure, technology, and human capital while positioning India as a leader in clean energy on the global stage.

Automotive

Shailesh Chandra, President, SIAM welcomes this budget which is focused on long-term sustained economic growth. He adds, “The specific focus on rural prosperity and agriculture, coupled with reforms in the Personal Income Tax, is likely to have a positive effect on the Auto Industry and will help create demand.

As the Auto Industry transits into cleaner powertrains, in line with the Hon’ble PM’s vision of sustainable mobility, it will benefit from the National Manufacturing Mission, which supports clean tech manufacturing for batteries, motors and controllers. Furthermore, the exemption of critical minerals (e.g. Cobalt, Lead, Zinc etc.), scraps of Lithium-ion batteries, and 35 additional capital goods from customs duty will help create a strong EV ecosystem in the country. The Export Promotion Mission and support for integration with global supply chains are critical initiatives that enable Indian manufacturers to expand export footprints and align with global supply chains.”

The Auto Industry is also thankful to the Government for creating a high-level committee for regulatory reforms, aimed at reviewing regulations, certifications, licenses, and permissions, as this will certainly help in ease of doing business in our sector.”

Pali Tripathi, CEO, of Taabi Mobility Limited (RPG Group) shares that the transformation of India Post into a large-scale logistics network, along with greater accessibility to PM Gati Shakti data for the private sector, will enhance connectivity, particularly in hinterland regions. These initiatives will drive smarter freight management, optimise last-mile delivery, and make transportation more seamless and sustainable. 

Additionally, the government’s focus on infrastructure upgradation in air cargo and warehousing will streamline multimodal logistics, reducing transit times and improving supply chain resilience. The inclusion of gig workers in social security schemes, with ID registration on the e-Shram portal and health coverage under PM Jan Arogya Yojana, is a commendable step in recognising their crucial role in keeping India moving. 

With a clear push for digital public infrastructure and stronger PPP initiatives, this budget paves the way for a smarter, more connected, and AI-powered logistics ecosystem in India.”

MSMEs

Vijay Karia Chairman and Managing Director at Ravin Group says for MSMEs, the true impact is not just in credit access or compliance simplifications—it is in breaking barriers to scale. Indian businesses must stop thinking small. With enhanced investment and turnover limits, this is the moment for MSMEs to go beyond survival mode and become global players. The future belongs to those who innovate, embrace automation, and integrate with international markets. This budget gives them the tools to do just that.

Infrastructure is no longer just about roads and railways—it is about building the foundation for India’s industrial dominance. Large-scale electrification, power transmission upgrades, and rural connectivity will generate unprecedented demand for advanced electrical solutions, high-efficiency cables, and resilient grid networks. Companies that position themselves in these high-growth sectors today will dictate the market tomorrow.

Dilip Sawhney, Managing Director, Rockwell Automation India shares, “We commend the Union Budget 2025 for its strategic focus on empowering Micro, Small, and Medium Enterprises (MSMEs), which are crucial to India’s growth narrative. With more than 5.7 crore MSMEs contributing 36% of the nation’s manufacturing output and 45% of exports, these businesses play a vital role in enhancing India’s status as a global manufacturing hub. The budget paves the way for a significant overhaul of India’s industrial and logistics landscape. This bold initiative will significantly benefit the manufacturing, warehousing, and supply chain sectors. Furthermore, the National Manufacturing Mission’s emphasis on clean technology manufacturing, including the domestic production of electric vehicle (EV) batteries and solar panels, is a progressive initiative.”

The decision to establish five National Centres of Excellence will enhance AI-based research and development while addressing the growing need for skills in technology-driven manufacturing. The announcement of global skilling partnerships is also a welcome step, ensuring that India cultivates a highly skilled workforce that strengthens its role in the global manufacturing ecosystem. The establishment of a national guidance framework to assist states in supporting Global Capability Centers (GCCs) further demonstrates the government’s commitment to promoting innovation and enhancing global competitiveness. The allocation of ₹20,000 crore to implement a private sector-driven Research, Development, and Innovation initiative is a significant move that will stimulate technological advancements and drive industrial transformation.

Expenditure of Major Items

Defence 491,732, Rural Development 266,817, Home Affairs 233,211, Agriculture and Allied Activities 171,437, Education 128,650, Health 98,311, Urban Development 96,777, IT and Telecom 95,298, Energy 81,174, Commerce & Industry 65,553, Social Welfare 60,052, Scientific Departments 55,679 in ₹ Crore.