March 25, 2025: EV Battery sector in India got a major boost from the Government to further fuel the growth of India’s electric vehicle (EV) industry, India has removed import duties on several key materials and components essential for manufacturing EV batteries and mobile phones.
This policy shift comes as part of India’s broader strategy to strengthen domestic manufacturing and enhance its global competitiveness, especially as US tariffs loom.
The Centre’s decision, announced by Finance Minister Nirmala Sitharaman, targets the growing need for critical raw materials used in the EV and mobile phone sectors. Effective immediately, 35 items vital for EV battery production and 28 used in mobile phone assembly will be exempted from import duties.
Sitharaman addressed the move in a speech ahead of the Finance Bill 2025 vote in Parliament, emphasizing that the policy is designed to mitigate the impact of reciprocal tariffs imposed by the US, set to take effect from April 2. “We aim to boost domestic production and enhance export competitiveness by reducing duties on raw materials,” she stated.
In particular, this policy focuses on crucial materials for EV battery manufacturing, including cobalt, lithium-ion battery scrap, and lead, among others. By lowering the cost of these imports, India expects to reduce production expenses for EV batteries, making electric vehicles more affordable for consumers and increasing the domestic manufacturing capacity.
Strategic Tariff Exemptions for the Indian EV Battery Sector
The government’s decision aligns with the emphasis placed on the EV sector during the Union Budget 2025-26. In her budget presentation, Sitharaman proposed additional exemptions, including duty waivers for several vital raw materials like cobalt power and 12 critical minerals necessary for EV battery manufacturing. The Finance Minister also highlighted the reduction of tariffs on open cells and other critical EV battery components.
The government’s ongoing efforts to bolster the EV industry are part of a broader initiative to make India a global manufacturing hub. Through the establishment of a National Manufacturing Mission, the government plans to support the growth of both small and medium-sized enterprises (MSMEs) and large enterprises in the clean-tech sector, particularly in the production of solar cells and EV components.
India’s Growing Role in Global EV Supply Chains
The decision to reduce duties is a crucial step in India’s efforts to enhance its position in the global electric mobility ecosystem. By reducing import duties, India aims to lower manufacturing costs for domestic companies, thereby attracting more investments and fostering innovation. Furthermore, with the Indian government actively negotiating a bilateral trade agreement with the US, both nations are working together to resolve tariff concerns and strengthen trade relations in the EV and technology sectors.
As India continues to position itself as a leader in electric vehicle manufacturing, this policy change is expected to have a lasting positive impact on the nation’s economy, creating jobs, and advancing India’s clean energy transition.
