Union Budget 2025 Takeaway: Sitharaman proposes to cut duty on capital goods used in lithium-ion battery production

Nirmala Sitharaman presented her historic eighth Budget

New Delhi: Finance Minister Nirmala Sitharaman on Saturday proposed to extend duty exemptions on capital goods used in the production of lithium-ion batteries.

The move is aimed at aiding domestic manufacturing of lithium-ion batteries, a key component in electric vehicles and mobile phones. The move is aimed at aiding domestic manufacturing of lithium-ion batteries, a key component in electric vehicles and mobile phones.

"To the list of exempted capital goods, I propose to add 35 additional capital goods for EV battery manufacturing, and 28 additional capital goods for mobile phone battery manufacturing," she said.

This will boost domestic manufacture of lithium-ion batteries, both for mobile phones and electric vehicles, the finance minister said while presenting her record 8th straight Budget.

Grant Thornton Bharat Partner and Auto & EV Industry Leader Saket Mehra said that a reduction in customs duty on lithium will significantly lower input costs for manufacturing lithium-ion batteries in India, providing a much-needed boost to the country’s emerging electric vehicle sector.

Uno Minda Chairman and Managing Director Nirmal K Minda said the government's emphasis on manufacturing EV batteries and components will significantly enhance domestic manufacturing capacities and reduce import dependence.

Efforts to localise key EV components like batteries, motors, and controllers will also help lower upfront costs, making EVs more accessible to consumers and strengthening India's EV ecosystem, he added.

Revamp Moto co-founder and CEO Pritesh Mahajan said the proposal to fully exempt Basic Customs Duty (BCD) on cobalt powder, lithium-ion battery waste, scrap, and 12 other critical minerals is a crucial step in ensuring the availability of key raw materials for domestic manufacturing.

This will not only lower production costs but also incentivise companies to scale up operations, drive technological advancements, and create high-value job opportunities, he added.

Union Budget 2025 | Nirmala Sitharaman, as Finance Minister, presented her record 8th Union Budget this time. While inflation has burnt a hole in the pockets of 'aam janata', the Modi govt gave income tax relief for those making up to Rs 12 lakh per year in salaried income. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.