EV Battery: India’s decision to exempt import duties on 35 capital goods used in the manufacture of electric vehicle (EV) batteries and 28 items used in the making of mobile phone batteries is a welcome step toward boosting domestic manufacturing and clean technology adoption. Proposed by Finance Minister Nirmala Sitharaman in the Union Budget 2025-26.
Key Highlights of EV Battery
Duty Exemption & Strategic Policy Shift
- Union Budget 2025-26 proposed duty exemption on 35 capital goods for EV battery production.
- Finance Bill 2025 formalised the measure – aimed at boosting domestic battery manufacturing.
Technological Advancement
- BYD’s “Super E-platform”: 500 km range with 5-minute charging – challenges conventional vehicles.
- Focus on low-cost lithium iron phosphate (LFP) batteries for better efficiency and lower cost.
India’s Market Landscape
- EVs make up just 2% of car sales in India (vs 45% in China).
- Two-wheelers dominate: 1.14 million sold in 2024 (~60% of EV sales in India).
Geopolitical & Economic Impact
- China holds 70%+ share of global EV battery production.
- India’s move aims to reduce dependence on China, diversify supply chains and boost trade ties with developed nations.
Strategic Goals
- Integrate upstream (mining) and downstream (manufacturing) EV supply chains.
- Use policy leverage for tech transfer, R&D collaboration, and cleaner mobility ecosystem.
Analysis & Way Forward
- Duty exemption is a welcome step, but India must build indigenous EV value chains and foster global alliances for tech and trade.
- Focus should be on R&D investments, reciprocal trade agreements, and ecosystem infrastructure like charging and recycling.
Mains Mock Question
“Discuss how India’s recent EV battery policy initiatives can contribute to sustainable transport and economic decoupling from China. Suggest strategies to improve domestic EV manufacturing.”
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