Budget 2025-26: Experts say exemption of customs duty on lithium-ion battery, cobalt to make EVs cheaper

The exemption of customs duty on the waste of lithium-ion batteries, scrap of cobalt powder, waste and scrap of lead and zinc, respectively, and 12 critical minerals will make electric vehicles cheaper in India, according to industry experts. 

“The exemption of critical minerals (e.g. cobalt, lead, zinc etc.), scraps of Lithium-ion battery, and 35 additional capital goods from customs duty, will help create a strong EV ecosystem in the country,” says Shailesh Chandra, President, SIAM and MD, Tata Motors Passenger Vehicles and Tata Motors Electric Mobility.

According to Vinayak Walimbe- President (Interim) – India Energy Storage Alliance and Managing Director – Customized Energy Solutions Pvt. Ltd. India, the basic customs duty (BCD) exemption on cobalt and lithium will help reduce raw material costs, improve manufacturers’ profit margins, and enhance the cost-effectiveness of domestically produced lithium components, cells, and electric vehicles.  “Exempting duties on lithium battery waste and scrap will support battery recyclers in importing feedstock materials to India and enhance metal processing capabilities. This will reduce dependency on imports of freshly mined lithium and encourage domestic cell manufacturers to procure recycled lithium,” says Walimbe. 

Saket Mehra, Partner and Auto & EV Industry Leader, Grant Thornton Bharat, says that lower import costs will make EVs more affordable. “Lower import costs will make EVs more affordable, while investments in domestic mineral exploration, battery manufacturing, and electrolyte production will drive long-term self-reliance. These initiatives will reduce supply chain vulnerabilities and accelerate India’s shift to clean mobility,” says Mehra.