Entrepreneurs seek tax neutrality for homecoming of startups
The startups and electric vehicle sector in the country are looking at the Modi 3.0 administration to streamline policies to propel the growth story. They expect the Budget to introduce some crucial measures to further uplift these two thriving sectors in India.
As India’s startup ecosystem strengthens, it is witnessing a new trend — reverse flipping. This means moving they are moving their headquarters from overseas back to India. Startups hope that the upcoming Budget will include tax neutrality for reverse flipping. “The tax neutrality on the migration of shareholding from overseas to India will empower startups to consolidate operations and key funding domestically, boosting investment and contributing to economic growth.
Additional relaxations, such as relaxing vesting periods for ESOPs post-flip, harmonising capital gains tax rates for resident investors and extending the period for carrying forward accumulated losses, will further ease the reverse flip process,” Ramesh Bafna, CFO, Zepto, said.
Simplify GST structure
To achieve the ambitious target of 30 per cent EV penetration by 2030, it’s crucial to tackle both manufacturing and consumer-centric challenges. “Simplifying the GST structure with a uniform 5 per cent tax across EVs, components and charging infrastructure is essential to reducing costs and fostering growth. Additionally, resolving the inverted GST structure on raw materials would ease working capital pressures and encourage sustainable manufacturing, Dinkar Agrawal, founder, CTO & COO, Oben Electric, said. On the consumer front, initiatives like reduced interest rates on EV loans and targeted subsidies can make electric vehicles more accessible, bridging the affordability gap.
Expand infrastructure
EV players are optimistic about Budget’s potential to accelerate the EV transition in India. Key focus areas such as expanding charging infrastructure and making PLI schemes more accessible to startups can be game-changers for the industry. These measures will not only drive adoption but also empower homegrown innovators to push the boundaries of technology and design,” Narayan Subramaniam, CEO and co-founder, Ultraviolette, said.
Bridge skill gap
Entrepreneurs are urging the government to prioritise revamping India’s skilling ecosystem to meet digital age demands and empower startups and small businesses to create quality jobs.
“Overhauling the apprenticeship programme, aligning training with employer needs at a hyperlocal level, supporting small businesses equally as startups, and leveraging AI-driven learning can bridge the skills gap and enable youth to seize entrepreneurial opportunities,” Dr Ajay Kela, president and CEO, Wadhwani Foundation, said.
