New Delhi, Feb. 1 -- Going into the Union Budget 2026-27, expectations from the automobile sector were decidedly high. While the budget was not hostile towards the sector, it was not ambitious either. The focus remained firmly on increasing manufacturing depth, rather than enhancing adoption velocity or providing some much-needed policy clarity. The over 1% correction in the Nifty Auto Index on 1 February reflected this disappointment.

India's automotive sector, which had been buoyed by exports and accelerated electric vehicle (EV) adoption, has recently hit one speed-breaker after another.

EVs lost some of their tax-edge over internal combustion engine (ICE) vehicles after the goods and services tax (GST) rates on the latter were ratio...