Finance Minister Nirmala Sitharaman announced a full exemption on basic customs duty on critical minerals used in EV battery manufacturing, which shou
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Electric vehicles are all set to get more affordable as Finance Minister Nirmala Sitharaman proposed the removal of Basic Customs Duty (BCD) on key minerals for manufacturing electric vehicle batteries. The Finance Minister presented the first full budget under the Modi government 3.0 bringing key exemptions to boost local manufacturing of lithium-ion batteries and related sectors.
Exemption on critical minerals & reduction in import duties
In her speech, Finance Minister Nirmala Sitharaman announced a full exemption from BCD on cobalt powder, lithium-ion battery waste and scrap, lead, zinc, and twelve other critical minerals. Moreover, the minister has announced a reduction in import duties on essential battery production equipment, which will further help lower battery manufacturing costs. This, in turn, will help lower prices on EV manufacturing.
How do EVs get cheaper?
The move will be a significant booster for local players including Tata Motors, Ola Electric, Log9 Materials, Reliance Industries, and more, which are actively working on producing batteries and battery cells in India. The local manufacturing majorly helps reduce dependency on other markets including China and South Korea, which continue to be major suppliers for batteries in India.
Reacting to the announcement, Rajesh Gupta, Founder & Director – Recyclekaro, said, “The Union Budget 2025 takes a decisive step towards strengthening India’s battery recycling and manufacturing ecosystem. The exemption of Basic Customs Duty (BCD) on critical minerals like cobalt, lithium-ion battery scrap, lead, and zinc will enhance domestic resource availability, reduce dependency on imports, and accelerate value addition within India. This move aligns with India’s vision for a circular economy, fostering investment in battery recycling and EV supply chains. The addition of new capital goods for EV and mobile battery manufacturing will further boost local production and job creation.”
How does it benefit?
The EV battery sector will majorly benefit from the tax exemption, boost the domestic sector, and drive innovation. The announcement promises to make electric vehicles more affordable and is also a step further towards encouraging the adoption of electric vehicles to minimise crude oil imports and tailpipe emissions while promoting sustainability. The central government aims to achieve 30 per cent of overall sales coming from EVs by 2030.
Check out Upcoming EV Cars in India, Upcoming EV Bikes in India.
First Published Date: 01 Feb 2025, 15:20 PM IST
#Budget #EVs #affordable #India
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