Lithium, copper, cobalt, and nickel, essential minerals for e-mobility and renewable energy, are not subject to customs duty.
Finance Minister Nirmala Sitharaman announced the establishment of the Critical Mineral Mission in the Union Budget 2024-25 to enhance domestic production, overseas acquisition of critical minerals, and their recycling. This initiative indirectly boosts electric vehicle (EV) production in India by focusing on minerals vital for e-mobility and renewable energy. The policy encompasses technology development, a skilled workforce, an extended producer responsibility framework, and a suitable financing mechanism. In the interim budget of February 2024, the Finance Minister had outlined the Government of India’s strategy to enhance energy security in terms of availability, accessibility, and affordability.
Critical minerals such as lithium, copper, cobalt, and rare earth elements—totalling 25—are exempt from customs duties. These minerals are crucial in sectors like nuclear energy, renewable energy, space, defence, telecommunications, and high-tech electronics.
The auto industry has expressed strong support for the new policy, recognizing its significant impact on boosting the recycling and production of critical minerals in India. Shradha Suri Marwah, President of ACMA and CMD of Subros stated that the removal of customs duties on critical minerals would promote cell manufacturing and enhance the development of the EV ecosystem in India.
Attero, a leading battery recycling company, sees this policy as a chance for India to achieve self-sufficiency in critical minerals and establish itself as a global recycling hub. Nitin Gupta, co-founder and CEO of Attero, mentioned that the elimination of customs duties on 25 critical minerals is highly advantageous for the processing and refining industries, thereby solidifying India’s position as a key player in the recycling and critical mineral processing sectors.
This initiative not only supports the EV industry’s growth but also underscores India’s commitment to sustainable mobility solutions that contribute to a cleaner transportation ecosystem. Pratik Kamdar, CEO and co-founder of Neuron Energy applauded the budget’s decision, highlighting that removing customs duties on minerals like lithium and cobalt will significantly reduce battery cell production costs, making EVs more affordable.
Ola’s Founder, Bhavish Aggarwal, also praised the policy, emphasizing its potential to revolutionize India’s energy transition and promote women’s employment.
Additionally, the Finance Minister announced the continuation of no Basic Customs Duty (BCD) on ferrous scrap and nickel cathode, along with a concessional BCD of 2.5% on copper scrap.
