To boost electric vehicles (EVs) and mobile phones sectors, the Budget has proposed to waive customs duty on 35 additional capital goods used in EV battery manufacturing, and 28 additional capital goods for mobile phone battery manufacturing.

“This will boost domestic manufacture of lithium-ion battery, both for mobile phones and electric vehicles,” Nirmala Sitharaman, Finance Minister, said on Saturday.

Apart from these, the Finance Minister also outlined other proposals like setting up of National Manufacturing Mission for clean technology manufacturing and support to domestic EV battery manufacturing, and exemption on basic customs duty on critical minerals related to EV and mobile battery manufacturing.

Veterans in the auto industry said these moves will help create a strong EV ecosystem in the country.

“The duty exemption on capital goods for EV battery manufacturing is a strong step toward enabling India’s transition to electric mobility,” Shradha Suri Marwah, President, ACMA, said.

Significant leap

The automobile sector stands poised for a significant leap forward, with substantial investments in green energy and a clear policy framework to support energy storage solutions, Pawan Munjal, Executive Chairman, Hero MotoCorp, said.

“These measures will accelerate India’s transition to a clean mobility future, reinforcing its commitment to sustainability and technological innovation,” he added.

Similarly, Santosh Iyer, Managing Director & CEO, Mercedes-Benz India, said the announcement of setting up of National Manufacturing Mission’s for clean technology manufacturing and support to domestic EV battery manufacturing is a positive step towards strengthening EV ecosystem. “We also welcome the setting up of a high-level committee to evaluate regulatory reforms which will enhance ease of doing business in long term,” Iyer said.

The focus on clean tech manufacturing, particularly in areas like solar PV cells, EV batteries, and wind turbines in this Budget, will help reduce India’s dependence on imports and promote sustainable development, Ayush Lohia, CEO, Lohia Auto said, adding, this will also promote the domestic manufacturing and backward integration.

Strengthening the clean technology ecosystem will accelerate the transition toward greener mobility and manufacturing, Nirmal K Minda, Chairman and MD, Uno Minda, said. “Efforts to localise key EV components such as batteries, motors, and controllers will also help lower upfront costs, making EVs more accessible to consumers and strengthening India’s EV ecosystem,” Minda added.

“By fostering local innovation and ensuring cost efficiency, this Budget lays the foundation for rapid industry growth and broader adoption of electric vehicles,” Ajinkya Firodia, Vice Chairman and MD, Kinetic Engineering, said.

However, while this Budget aligns with India’s broader vision for progress and positive steps on promoting clean technologies, there remains an urgent need to rationalise the GST disparity between EVs and batteries that the EV industry needs, said Chetan Maini, Co-Founder and Chairman, Sun Mobility.

“In addition, policies to enable a level playing field for battery swapping and fixed-battery EVs can further accelerate investments and adoption of electrical mobility in the country,” Maini said.

“Lithium-ion batteries have been provided with an exemption but due to the limited lithium-ion reserve in India, the dependence on imports will continue. The larger impact will be on the blended cost of raw materials which will be lower. EV penetration will increase along with the profitability of EV companies,” Srikumar Krishnamurthy, Senior Vice president & CO-Group Head, ICRA Limited said.

(With inputs from Aroosa Ahmed)

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