17th September 2025: India’s latest Goods and Services Tax (GST) reforms, set to take effect on September 22, 2025, are expected to significantly boost the electric and clean mobility ecosystem. The move to unify GST on auto parts at 18 percent simplifies the tax structure and resolves the long-standing issue of inverted duty. This reform will reduce supply chain costs, make vehicles more affordable, and help accelerate the transition toward clean transportation.
Industry players such as BorgWarner, a global leader in sustainable mobility solutions, view this policy shift as a major catalyst for innovation and growth.
“By unifying auto parts taxation and simplifying the supply chain, GST 2.0 boosts affordability and frees up capital for product development and innovation,” said Chandrasekhar Krishnamurthy, Global Director and Head of Product Management, BorgWarner. “It’s a powerful incentive that enables us to enhance competitiveness while delivering more value to customers.”
The reduction of GST on entry-level cars and two-wheelers to 18 percent is expected to lead to a volume increase of 5 to 7 percent, particularly during festive periods. Although luxury vehicles remain taxed at 40 percent, the removal of the additional cess will result in overall savings for premium buyers. Electric vehicles (EVs), already taxed at a favorable 5 percent rate, continue to enjoy strong policy support.
This regulatory overhaul comes at a time when India’s automotive industry is undergoing rapid transformation. The sector is increasingly being seen as a sunrise industry with global potential. BorgWarner’s latest sustainability report, titled Engineered for Resilience, reflects how companies are adapting to meet this opportunity.
In 2025, BorgWarner generated 87 percent of its revenue from electric, hybrid, and emissions-reducing combustion products. The company also reported a 36 percent absolute reduction in Scope 1 and Scope 2 greenhouse gas emissions from its 2021 baseline. It achieved a 100 percent compliance rate on its annual governance questionnaire and reported industry-leading safety performance and talent development milestones.
“Our employees are the driving force behind our progress – innovating technologies, reducing our environmental impact, and continuously adapting to meet customer and market needs,” said Joseph Fadool, President and Chief Executive Officer, BorgWarner. “Through our work, we continue to manage our business responsibly, putting people first, caring for the planet, and upholding integrity and accountability in all that we do.”
The reforms are seen as not only simplifying compliance and reducing costs but also as creating fertile ground for innovation-led product development. BorgWarner believes this will help shift the focus from cost-efficiency to engineering excellence and establish India as a global hub for future mobility technologies.
As the market aligns with sustainability goals and supportive regulation, India’s EV ecosystem is evolving fast. The shift from traditional manufacturing to intelligent, cleaner, and resilient mobility solutions is well underway, and companies like BorgWarner are ready to lead the change.
