As the Union Budget approaches, India’s Electric Vehicle (EV) and startup sectors are presenting a unified front, urging the government to prioritize long-term growth over short-term fixes. From tying subsidies to performance to simplifying the regulatory maze for founders, the industry is looking for a roadmap that solidifies India’s position as a global tech hub.

Here is a breakdown of the key expectations and wishlist items for the upcoming budget.

Related: Razorpay Begins IPO Preparations, Invites Banker Pitches For 2026 Listing

The EV industry is advocating for a shift in how financial incentives are distributed. Rather than flat subsidies, industry leaders are proposing that incentives be linked directly to sales performance and localization efforts.

• FAME-III Clarity: With the current incentive schemes nearing their end, there is a strong demand for the introduction of FAME-III. Stakeholders believe this version should focus on high-utilization sectors like commercial fleets and public transport.

• Performance-Linked Incentives (PLI): Manufacturers are pushing for an expansion of the PLI scheme to include smaller component makers, ensuring the entire supply chain—not just the big players—benefits from indigenization.

India’s startup landscape has faced a “funding winter,” and founders are looking to the government to provide warmth through fiscal policy.

Abolition of Angel Tax: A perennial demand remains the complete removal or further simplification of the ‘Angel Tax’ (Section 56(2)(viib) of the Income Tax Act). Founders argue this tax penalizes domestic investment and drives startups to incorporate overseas.

Direct Listing Abroad: Startups are seeking clearer guidelines and faster implementation of policies that allow Indian companies to list directly on foreign stock exchanges, providing them access to global capital.

Fund of Funds Expansion: Increasing the corpus of the “Fund of Funds” for startups could provide the much-needed liquidity for early-stage ventures struggling to scale.

“Ease of doing business” remains more than just a buzzword for the tech sector. The administrative burden of compliance often stifles innovation.

Single-Window Clearance: Startups are calling for a unified digital portal to handle all federal and state-level compliances, reducing the time spent on paperwork.

Tax Parity for Unlisted Shares: Currently, the capital gains tax on unlisted shares is higher than on listed ones. Bringing these to parity would encourage more domestic private equity and venture capital investment.

Beyond direct cash infusions, the industry is looking for structural support.

Charging Infrastructure: For the EV sector to truly take off, a massive rollout of charging stations is required. The industry expects tax breaks for companies investing in charging grids and battery-swapping technology.

R&D Tax Credits: To foster deep-tech innovation, a dedicated tax credit for Research and Development (R&D) would allow startups to compete with global tech giants in fields like AI, semiconductors, and green energy.

The overarching sentiment for the 2024-25 Budget is a transition from “survival” to “sustainable scale.” By addressing the friction in compliance and refining the subsidy model for EVs, the government can ensure that India’s “Startup India” and “Make in India” initiatives move in lockstep toward a $5 trillion economy.