Govt Drops Import Duty making EV Batteries cheaper

 

 

 

In a significant push for the Electric Vehicle (EV) industry, the Indian government has removed import duties on key raw materials used in EV battery production. This move is expected to lower EV battery prices, making electric vehicles (EVs) more affordable and accelerating EV market growth in India.

Finance Minister Nirmala Sitharaman announced the exemption of import duties on 35 essential items used in EV battery manufacturing and 28 items for mobile phone production. This initiative is part of the government’s broader efforts to strengthen India's EV market by reducing production costs and encouraging local manufacturing. Lower battery costs will not only make affordable electric cars more accessible to consumers but also help automakers scale up production, further driving the expansion of the India EV market.

“We aim to boost domestic production and enhance export competitiveness by reducing duties on raw materials,” said finance minister Nirmala Sitharaman ahead of a vote to pass Finance Bill 2025 in parliament.

Additionally, the decision comes as a response to the impact of US President Donald Trump’s reciprocal tariffs, which are set to take effect from April 2. By eliminating import duties, India aims to shield its EV and technology sectors from global trade disruptions while enhancing its position as a leader in the future of EVs in India.

Industry experts believe that reducing battery costs will significantly impact the electric vehicle industry, as battery prices account for nearly 40% of an EV’s total cost. This exemption could encourage global EV manufacturers to increase investments in India, further boosting the adoption of electric vehicles (EVs) across the country.

With these measures, the Indian government continues to prioritize sustainable mobility, supporting both consumers and manufacturers in transitioning towards a cleaner, greener EV future.