As conversations around the Union Budget 2026 intensify, policymakers face a clear choice: treat road safety as a narrow transport issue or recognise it as a public-health and economic priority. India loses over 1.5 lakh people every year to road accidents, with two-wheelers accounting for a disproportionately high share of fatalities. Helmets and protective gear remain the single most effective line of defence, yet adoption, affordability, and compliance continue to lag.
India’s safety and mobility startups operate at the intersection of innovation and public interest. They design certified helmets, protective gear, safety-focused D2C products, and manufacturing solutions tailored for Indian roads and riders. Despite this alignment with national safety goals, policy friction continues to slow their scale. The Union Budget 2026 can remove these frictions through targeted, fiscally efficient interventions rather than broad subsidies.
Alpana Parida, Founder of Tvarra, articulates this gap clearly:
“Our key expectations from the Budget are:
1. Rationalise GST on life-saving products: Helmets currently attract 18% GST, despite being essential for road safety. Bringing them closer to public-health categories would improve affordability, adoption, and compliance, especially for women and first-time riders.
2. Create a safety-products manufacturing incentive: Introduce a focused incentive or reimbursement for testing, certification (ISI/ECE), and tooling costs in safety and mobility products, which are high but unavoidable for startups.
3. Enable faster, automatic GST refunds for D2C brands: A time-bound, automated GST refund mechanism for compliant startups would directly ease cash-flow stress without adding new subsidies.
4. A Budget that addresses these specific friction points can help purpose-led startups scale responsibly while delivering measurable public-safety outcomes.”
Her expectations point to three precise policy fixes that Budget 2026 can implement with immediate impact.
1. Rationalise GST on helmets as life-saving equipment
India currently taxes helmets at 18% GST, placing them in the same category as non-essential industrial goods. This structure directly increases retail prices and discourages purchase, particularly among first-time riders, women riders, students, and low-income commuters. In price-sensitive markets, even a small reduction in cost significantly influences adoption.
India already recognises several preventive health tools under lower tax slabs. Helmets serve the same preventive function. Studies consistently show that certified helmets reduce the risk of head injury and death by a large margin. Yet the current tax framework sends the opposite signal by treating helmets as discretionary consumption rather than public-safety equipment.
Budget 2026 should reduce GST on certified ISI/ECE helmets to a lower slab such as 5% or zero, while maintaining a higher rate for novelty or non-certified headgear. This distinction would simultaneously improve affordability and push consumers toward safer, certified products.
The government can further strengthen this reform by mandating visible certification labelling and QR-based verification. Such measures would protect revenue, discourage misuse of lower tax rates, and reinforce compliance across marketplaces and retail outlets.
2. Introduce a focused manufacturing incentive for safety products
Safety-product startups face unusually high upfront costs before they sell a single unit. Tooling for moulds, impact testing, laboratory certification, BIS compliance, and international standards such as ECE impose unavoidable expenses. These costs do not scale down for startups and often delay product launches by months.
Large incumbents absorb these expenses through volume. Startups cannot. As a result, many promising safety innovations fail to reach the market or remain stuck at pilot scale. This problem does not stem from lack of demand or innovation but from fixed compliance costs that policy can directly ease.
Budget 2026 can introduce a targeted, one-time reimbursement or incentive for safety-product manufacturers registered as startups or MSMEs. The government can cap this incentive and tie it strictly to certification, testing, and tooling expenses. Such a structure avoids open-ended subsidies while supporting only serious, compliant manufacturers.
Additionally, accelerated depreciation on safety-related tooling and equipment or a small R&D-linked tax credit can further reduce the capital burden. Policymakers can also explore shared testing infrastructure within designated safety or mobility manufacturing clusters to lower per-unit certification costs.
These interventions would cost far less than large production-linked incentives yet deliver faster time-to-market, stronger domestic manufacturing, and higher compliance standards.
3. Enable fast, automatic GST refunds for compliant D2C brands
D2C safety and mobility startups operate in capital-intensive cycles. They invest upfront in inventory, manufacturing, and logistics before generating revenue. Delays in GST refunds often block working capital for months, forcing founders to divert funds from product development or safety improvements.
While GST systems have improved, startups still report delays due to manual checks, documentation mismatches, and procedural bottlenecks. For young companies with limited reserves, delayed refunds create disproportionate stress.
Budget 2026 should mandate a time-bound, automated GST refund mechanism for compliant startups. Firms that file returns on time, use e-invoicing, and meet KYC norms should receive refunds within a fixed window such as 30 to 45 days. The system can flag exceptions through risk-based audits rather than treating every claim as suspect.
This reform would not reduce tax revenue. Instead, it would unlock trapped capital already owed to businesses. Faster refunds would immediately improve liquidity, enable reinvestment in safety innovation, and reduce dependence on external debt.
Why these fixes matter for public safety
India records over 1.5 lakh road deaths annually, with millions more suffering serious injuries. Two-wheelers dominate accident statistics, and head injuries account for a large share of fatalities. Despite helmet laws, correct helmet usage remains inconsistent. Many riders use non-certified helmets or fail to fasten them properly, reducing protection.
Price, comfort, and availability directly influence helmet choice. Policy that reduces certified helmet prices and supports domestic manufacturers directly improves outcomes on the road. These changes translate fiscal decisions into lives saved, healthcare costs avoided, and productivity preserved.
Unlike large infrastructure projects, safety-product reforms deliver results within months, not years.
A budget that fixes friction, not one that adds complexity
The most effective budgets do not rely on grand announcements. They remove friction from systems that already work. Lower GST on certified helmets, limited reimbursement for unavoidable manufacturing costs, and automated refunds for compliant startups represent such friction-removal policies.
These measures remain fiscally prudent, administratively feasible, and politically defensible. More importantly, they align startup incentives with national safety outcomes.
Union Budget 2026 has the opportunity to send a clear signal: India values prevention as much as enforcement, and innovation as much as regulation. By implementing these targeted fixes, policymakers can empower safety startups to scale responsibly while delivering measurable improvements on Indian roads.
Also Read – How Startups Can Stay Compliant Without Complexity