New Delhi, Feb 03 : India’s Finance Minister Nirmala Sitharaman announced a significant exemption on Basic Customs Duty (BCD) for key materials used in electric vehicle (EV) battery production in the Union Budget 2025, a move that industry leaders say will drive affordability and domestic manufacturing in the EV sector.
The exemption, which includes essential materials such as cobalt powder, lithium-ion battery waste and scrap, lead, zinc, and 12 other critical minerals, is expected to lower EV battery costs and promote self-reliance in India’s clean mobility transition. The Modi government aims for 30% of automobile sales to be electric by 2030, aligning with its broader sustainability goals.
Saket Mehra, Partner and Auto & EV Industry Leader at Grant Thornton Bharat, welcomed the initiative, saying, “The Budget’s customs duty cuts on lithium-ion batteries, alongside the National Critical Mineral Mission, mark a key step in strengthening India’s EV ecosystem. Lower import costs will make EVs more affordable, while investments in domestic mineral exploration, battery manufacturing, and electrolyte production will drive long-term self-reliance.
”Girish Wagh, Executive Director at Tata Motors, described the budget as “a clear roadmap for long-term transformation, driving India closer to its vision of a ‘Viksit Bharat’ with progressive policies and reforms.” He added that “the removal of basic customs duties on key materials for battery manufacturing is a strategic move to boost domestic EV production, foster a sustainable ecosystem, and drive India’s transition to a greener economy.
”Industry representatives noted that the budget focuses on reducing dependency on foreign imports and strengthening local production.
Shradha Suri Marwah, President of the Automotive Component Manufacturers Association (ACMA), said, “The Union Budget 2025-26 is forward-looking and growth-centric, reinforcing the government’s commitment to strengthening India’s manufacturing sector and driving the transition to cleaner mobility solutions.
”Jyoti Malhotra, Managing Director of Volvo Car India, highlighted the government’s focus on local value addition, stating, “The emphasis on domestic value addition for EV batteries, including battery recycling and customs duty exemption on 35 capital goods for EV battery manufacturing, is encouraging.
”Shailesh Chandra, President of the Society of Indian Automobile Manufacturers (SIAM), called the budget a positive step for India’s EV ecosystem. “The exemption of critical minerals (e.g., cobalt, lead, zinc), lithium-ion battery scrap, and 35 additional capital goods from customs duty will help create a strong EV ecosystem,” he said.
Anish Shah, Group CEO & MD of Mahindra Group, emphasized the budget’s impact on India’s manufacturing sector. “The theme of ‘Make in India for the world’ remains a key focus, with efforts to reduce India’s manufacturing costs poised to significantly enhance the country’s global competitiveness,” he said.
Abhijeet Sinha, Project Director for the National Highways for Electric Vehicles (NHEV), pointed to the expected benefits of tax exemptions, noting, “Budget 2025-26 introduced tax incentives, including full exemption from BCD on key battery materials, expected to result in cheaper EV batteries and make electric vehicles more affordable.
”Sulajja Firodia Motwani, Founder & CEO of Kinetic Green, called the duty exemption a “welcome move” that would streamline the EV battery supply chain and reduce costs.
Venkatram Mamillapalle, Country CEO & MD of Renault India, linked the revised tax structure to increased consumer spending, saying, “The revised tax structure exempting income up to ₹12 lakh will boost consumer spending, positively impacting vehicle purchases, especially among the growing middle class.
”Narayan Subramaniam, CEO & Head of Design at Ultraviolette Automotive Pvt. Ltd., described the inclusion of 35 capital goods in the exemption list as “a transformative move, significantly reducing production costs and fostering innovation in lithium-ion battery production.
”Pawan Munjal, Executive Chairman of Hero MotoCorp, called the budget a “bold push for manufacturing, green mobility, and rural empowerment—driving innovation, job creation, and global leadership.
”Rajeev Chaba, CEO Emeritus of JSW MG Motor India, highlighted the potential boost to India’s emerging EV market, saying, “The Government’s focus on enhancing domestic manufacturing capabilities and battery production will help India’s emerging EV market and boost local manufacturing.
”Volkswagen India’s Brand Director, Ashish Gupta, saw the budget as a forward-looking step for the country’s manufacturing ecosystem. “The Union Budget 2025 presents a forward-thinking roadmap for strengthening India’s manufacturing ecosystem, with a clear emphasis on clean technology, skill development, and infrastructure growth,” he said.
Sudarshan Venu, Managing Director of TVS Motor Company, called the budget “a game-changer.” He noted that “tax relief for the middle class means more disposable income, driving consumption. The National Manufacturing Mission’s focus on clean manufacturing will further strengthen investment in India’s EV sector.
”The Union Budget 2025’s customs duty exemptions on critical minerals and EV battery components mark a significant push for India’s electric mobility sector. With industry leaders hailing the move as a boost for affordability, manufacturing, and long-term self-reliance, the budget reinforces India’s commitment to sustainable transportation and economic growth.
