The Union Budget 2025 has exempted customs duty on cobalt, lithium-ion battery waste, and 12 other critical minerals. This is done to strengthen the clean energy sector in India, to further bolster domestic battery manufacturing, and reduce dependence on imports. That will lower costs for production in important sectors such as electric vehicles, renewable energy, and energy storage solutions.
Strengthening India’s Clean Energy Supply Chain
This will go a long way in helping the EV and renewable energy industries. In fact, one of the most critical elements in this energy transition that India needs is the recycling of lithium-ion batteries. Making raw material sourcing easier by removing import duties would encourage manufacturers to recycle used batteries, making them more cost-competitive. That’s how circularity in the clean energy economy can be initiated.
The 12 exempted critical minerals include nickel, rare earth elements, and other raw materials used in the production of solar panels, wind turbines, and battery storage systems. Most of these minerals are imported, and now, with the cost reduction, Indian companies will be able to invest more in local manufacturing and develop an efficient supply chain.
Encouraging Domestic Manufacturing and Investments
The policy, according to Finance Minister Nirmala Sitharaman, will contribute to the reduction of dependence on China and other foreign suppliers. In line with this, as global supply chains get disrupted, India looks forward to building self-sufficiency in clean energy technologies. This comes in line with an ambitious plan under the net-zero emissions target for 2070 and an increase in domestic production under Make in India.
The exemption will also attract fresh investments in mineral processing and battery manufacturing. The biggest beneficiaries of this duty relief will be companies that manufacture EV batteries, energy storage solutions, and solar equipment.
Industry Reactions and Future Outlook
This policy is expected to reduce the cost of production, increase the recycling of batteries, and also make electric vehicles more affordable. The renewable energy sector will attract more investment in solar and wind energy projects.
With this step, India will become one of the world leaders in clean energy manufacturing, ensuring a stronger and more sustainable future of the energy sector.
