Budget 2025: Import Tariffs on Key EV Minerals Scrapped for Cost Efficiency

In the budget 2025 address on Saturday, Finance Minister Nirmala Sitharaman announced that the government will eliminate import tariffs on essential minerals like cobalt, zinc, and lead, reducing them from the current 5%. The minister also announced that duties on equipment utilized in the production of lithium-ion batteries for electric vehicles and mobile phones will be eliminated. The modifications will take effect on Feb. 2.

“These will also support domestic manufacturing and value addition, promote exports, facilitate trade and provide relief to common people,” Sitharaman said. 

To boost export competitiveness in the leather and textile industries, the minister lowered customs duties on specific products.

The decrease in taxes across industries will assist Prime Minister Narendra Modi’s administration in strengthening domestic manufacturing and appealing to companies aiming to shift their operations from China. This action is vital in addressing US President Donald Trump's threats of widespread tariffs.

The size of the India Manufacturing Market is projected to be USD 338.57 billion in 2025 and is anticipated to grow to USD 523.56 billion by 2030, with a CAGR of 9.11% throughout the forecast period (2025-2030). India's manufacturing sector experienced multiple stages of growth throughout the pandemic, accounting for about 16-17% of the GDP and providing jobs for nearly 20% of the nation's labor force. It has emerged as a appealing hub for foreign investments, as various mobile phone, luxury, and automobile brands are setting up or contemplating manufacturing plants in the nation.