Auto Sector Maintains Momentum: Govt Assures Stable LPG Supply, Accelerates EV & Biofuel Push

The Indian auto component manufacturing sector reported no serious shortages of LPG, according to a senior government official. The Ministry of Heavy Industries confirmed that measures are actively underway with industry body ACMA to safeguard the supply chain and prevent any disruptions.

Addressing an inter-ministerial briefing, Additional Secretary Hanif Qureshi emphasized that the ministry is in constant dialogue with the automobile industry to address potential supply chain gaps. He added that the government has also advised manufacturers to strategically adopt cleaner fuels, such as PNG and electric furnaces, wherever they are feasible.

LPG Supply and Production Uptick Maintained​

Responding to media queries, Qureshi confirmed that while LPG is crucial for component manufacturing, the government is working closely with the Ministry of Petroleum and ACMA. He stated clearly that no serious shortages have been reported across the industry.

Furthermore, the official highlighted positive operational metrics. He noted that the production base for March saw a substantial increase, reporting that vehicle production rose by approximately 15 to 16 per cent in the month of March.

Boosting the Energy Transition with EVs and Biofuels​

The government’s commitment to the energy transition remains a core focus. Qureshi pointed out that alongside the Prime Minister's E-DRIVE scheme, which incentivizes consumer purchases of EVs, the PLI auto scheme directly supports manufacturers.

The Ministry is bolstering this effort with the Scheme to promote the Manufacturing of Rare Earth Magnets, which is expected to improve overall supply chain resilience and contribute to the goal of AatmaNirbhar Bharat.

In the realm of biofuels, the government is committed to maximizing the use of sustainable alternatives. Currently, 20 per cent ethanol blending is taking place, and the industry has developed robust models for flex fuels.

Strategic Policy Moves Stabilize Auto Ecosystem​

For Electric Vehicles, the government issued significant extensions to key subsidies. The subsidy period for three-wheeler e-rickshaws has been extended by two years, until March 2028. Similarly, the terminal date for subsidies on electric two-wheelers was extended by three months, until 31 July 2026.

The phased manufacturing programme (PMP) guidelines, which determine subsidy levels, were also adjusted. Recognizing supply chain complexities, the PMP guidelines for trucks and buses have been relaxed by six months, setting the new date as September 1, 2026.

Securing Supply Chains through Indigenous Manufacturing​

To insulate the auto industry from global instability, the Ministry of Heavy Industries is making concerted efforts to enhance supply chain resilience. A key focus area is indigenous magnet manufacturing.

For this, the ministry notified the rare earth permanent magnet manufacturing scheme with a total budgetary outlay of Rs 7,280 crore. This scheme aims to establish a domestic integrated manufacturing capacity of 6,000 MTPA.

Further strengthening the supply network, the ministry recently floated Requests for Proposals (RFP) on the CPP portal for this critical sector. Officials stressed that the ministry is in constant communication with the automobile industry to mitigate supply chain challenges arising from the West Asia crisis.