Union Budget 2025: Electric Vehicles To Be Cheaper In India

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In her budget speech, the Finance Minister announced the abolition of customs duties on battery manufacturing materials used in EVs

Nirmala Sitharaman, Minister of Finance, presented the Union Budget 2025 in the Parliament today. In her speech, FM announced that the basic customs duties on lithium-ion batteries used in electric vehicles will be fully exempted. This will subsequently result in lower prices of electric two-wheelers and four-wheelers in the Indian market as the battery pack makes up for 30-40 per cent cost of an electric vehicle.

By putting an end to the basic customs duties, it is believed that production costs will come down and the EV ecosystem will flourish. FM Sitharaman announced in her budget speech that 35 additional capital goods used in the manufacturing of electric vehicle batteries are added to the exemption list. This move will certainly give a boost to local production of lithium-ion battery packs which are used in the majority of electric cars by the leading automakers in the Indian market.

Pritesh Mahajan, Co-Founder & CEO of Revamp Moto said that the Finance Minister’s proposal to fully exempt Basic Customs Duty (BCD) on cobalt powder, lithium-ion battery waste, scrap, and 12 other critical minerals is a crucial step in ensuring the availability of key raw materials for domestic manufacturing.

2023 tata nexon ev facelift-29This will not only lower production costs but also incentivize companies to scale up operations, drive technological advancements, and create high-value job opportunities for India’s youth. The addition of 35 capital goods to the exempted list of materials will ensure no direct or indirect taxes on the import of machines and equipment used in battery production.

Hence, key EV brands such as Ola Electric, Tata Motors and Mahindra & Mahindra will greatly benefit from this move. The Union Government intends to scale up local production of EV battery packs and reduce dependency on China for EV batteries. Mr. Siddharth Patel, Founder of Greenway Mobility, believes that India’s push for sustainable mobility is getting a major boost with the removal of Basic Customs Duty (BCD) on critical materials like cobalt powder, lithium-ion battery waste, and other essential minerals.

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This bold move will lower manufacturing costs, ensure a steady supply of key resources, and accelerate the adoption of electric vehicles. More importantly, it paves the way for stronger domestic production, job creation, and advancements in battery technology.