Budget: Provision For Critical Minerals, Lithium To Boost EV Growth

By Chitrika Grover/ Updated On Tue, Jul 23rd, 2024

Highlights :

The recent budget announced a reduction of the BCD to zero on critical minerals and numerous components.
This move aims to bolster sectors heavily reliant on rare earth minerals, such as high-tech electronics, nuclear energy, and renewable energy.

Budget: Provision For Critical Minerals, Lithium To Boost EV Growth

The latest budget announced by Union Finance Nirmala Sitharaman announced several interventions that can fuel the growth of Electric Vehicles (EVs) and battery industries across the country.

In the recent budget released by the minister in the Parliament, she announced to reduction the Basic Customs Duty (BCD) to zero on critical minerals and numerous components. This move aims to bolster sectors heavily reliant on rare earth minerals, such as high-tech electronics, nuclear energy, and renewable energy.

Key changes related to the EV and battery sector include:

* Full exemption of Customs Duties on 25 Critical Minerals and reduction of BCD on two others, facilitating crucial sectors.

* Reduction of BCD on certain customs duties on gold and silver from 15% to 6%, and on platinum from 15.4% to 6.4%, aimed at enhancing domestic value addition in precious metal jewellery.

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* Removal of BCD on ferro nickel and blister copper to lower the production costs of steel and copper.

* The Finance Minister emphasized a comprehensive review of the Customs Duty rate structure in the next six months to streamline trade processes, remove duty inversion, and minimize disputes.

* The budget also introduced concessions on copper wire used in manufacturing photovoltaic ribbon and semiconductor devices, as well as evacuated tubes for solar water heaters. It specified materials for EVA sheets and toughened glass with low iron content for solar thermal collectors.

* Furthermore, the zero customs duty rate on specified parts and capital goods for lithium-ion cell manufacturing and electric vehicle battery packs has been extended until March 31, 2029. New capital goods have been added to the list of exempted items for the manufacture of solar cells and modules.

These measures are designed to stimulate growth in critical sectors, promote domestic manufacturing, and bolster India’s sustainable development agenda.