Union Budget 2025: Key Measures to Boost India’s Electric Vehicle Sector
Finance Minister Nirmala Sitharaman unveiled the Union Budget 2025-26, with a focus on accelerating the growth of India’s electric vehicle (EV) sector.
On February 1, Finance Minister Nirmala Sitharaman unveiled the Union Budget 2025-26, with a focus on accelerating the growth of India’s electric vehicle (EV) sector. With the aim of achieving 30 per cent of automobile sales from electric vehicles by 2030, these measures are crucial in making EVs more affordable and advancing India’s transition to a greener, sustainable future.
Customs Duty Cuts on Key Minerals for EV Batteries
A major highlight in the Budget is the removal of Basic Customs Duty (BCD) on specific key minerals essential for EV battery production. This includes minerals like cobalt powder, zinc, lead, lithium-ion battery scraps and twelve other critical minerals. By eliminating import duties on these materials, the government aims to lower the overall cost of EV batteries, making electric vehicles more affordable for consumers and accelerating EV adoption across the country.
Tax Incentives to Boost Domestic Manufacturing
The government has also rolled out tax incentives to encourage domestic manufacturing in the EV sector. In a major step to strengthen the local supply chain, the exemption list for capital goods has been expanded to include 35 additional items for EV battery production and 28 more for mobile phone battery manufacturing. These incentives are expected to drive further growth in the local manufacturing ecosystem, supporting both green energy and digital device production in India.
Capital Expenditure and Infrastructure Boost
With the government allocating over ₹11 lakh crore in capital expenditure, the Budget focuses on improving India’s infrastructure, which will play a vital role in the growth of the EV industry. Better roads, connectivity, and logistics are expected to foster the demand for freight and commercial transport solutions, further propelling the adoption of electric vehicles.
These strategic moves align with the government’s vision for a sustainable economy, driving India’s transition to a greener future. The removal of customs duties on crucial materials, combined with efforts to boost local manufacturing, positions India as a key player in the global EV production and green energy sector. With the government’s targeted initiatives to boost demand and support Make in India, the EV sector is set to witness strong growth in the coming years.
Disclaimer: The article is for informational purposes only and not investment advice.