New Delhi, Feb 1 The scrapping of basic customs duty on the import of lithium-ion battery scrap and capital goods – or the machinery used to manufacture lithium-ion batteries – will strengthen the domestic battery storage ecosystem, the industry said on Saturday.
Finance Minister Nirmala Sitharaman, in her Union Budget 2025-26 budget speech, said that in 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".
"This will boost domestic manufacture of lithium-ion batteries, both for mobile phones and electric vehicles," FM Sitharaman added.
The Union Budget also proposed customs duty on waste and scrap of lithium-ion batteries from 5 per cent to zero.
The development of battery-backed renewable projects, which are expected to form over 33 per cent of renewable power capacity additions in India over the next 3-5 fiscals, will benefit by having greater control over costs, quality and supply of battery systems, said Ankit Hakhu, Director, Crisil Ratings Ltd.
According to Ashok Chandak, President of the India Electronics and Semiconductor Association (IESA), reduced basic customs duty on display panels and lithium-ion batteries will enhance local value addition in EVs and mobile manufacturing.
Angshuman Bhattacharya, Partner and National Leader, Consumer Product and Retail Sector, EY-Parthenon, said that electric vehicles and lithium carbonate batteries indigenisation will promote a vibrant ecosystem for a domestic ecosystem.
The Budget also promotes the manufacturing of renewable energy components, especially lithium-ion batteries in the country via extending the critical minerals list for BCD waiver.
In the July 2024 Budget, the Centre had fully exempted BCD on 25 critical minerals that are not domestically available.
"Now, I propose to fully exempt cobalt powder and waste, the scrap of lithium-ion battery, Lead, Zinc and 12 more critical minerals. This will help secure their availability for manufacturing in India and promote more jobs for our youth," said FM Sitharaman.
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