Finance Minister Nirmala Sitharaman presented the Union Budget 2025 with several key measures focused on electric vehicle (EV) battery production in India to strengthen local manufacturing. The budget aims to reduce costs and promote domestic manufacturing to support the growing demand for electric vehicles.
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Exemption of Additional Capital Goods from Basic Custom Duty
One of the significant announcements includes adding 35 capital goods to the list exempted from Basic Custom Duty (BCD). This exemption is expected to lower input costs for manufacturers, making it cheaper to produce EV batteries locally. With these reduced costs, more companies will likely invest in manufacturing EV batteries in India.
Critical Minerals Exempted from Basic Custom Duty
Additionally, the budget provides BCD exemptions for important raw materials required for battery production. Cobalt Powder, waste cobalt, and scrap from lithium-ion batteries, along with lead, zinc, and 12 other critical minerals, have been included in this exemption list. This move aims to further decrease the costs associated with sourcing necessary materials for battery manufacturing.
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Impact on Local Manufacturing and Job Creation
The initiatives outlined in Budget 2025 are expected to positively impact local manufacturing, creating more job opportunities in the sector. As domestic electric vehicle demand grows, these measures are designed to position India as a competitive player in the global EV market.
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