The Indian government announced that it will remove import duties on several key raw materials used in the production of electric vehicle (EV) batteries and mobile phones. The move is part of a broader strategy to strengthen local manufacturing and enhance export competitiveness amid growing global trade tensions.
Finance Minister Nirmala Sitharaman, speaking ahead of the Finance Bill 2025 vote in Parliament, stated, “We aim to boost domestic production and enhance export competitiveness by reducing duties on raw materials.”
Duty Exemptions on Key Components
To support the EV and mobile phone industries, the government has exempted 35 items used in EV battery production and 28 items used in mobile phone manufacturing from import duties. These exemptions are expected to lower production costs and encourage domestic manufacturers to scale up operations.
Response to US Tariffs and Trade Talks
India’s tariff cuts come as the country prepares for the impact of reciprocal tariffs imposed by the US, set to take effect on April 2. The Indian government is engaged in discussions with the US to resolve trade issues and negotiate a bilateral trade agreement that benefits both nations.
Earlier reports indicated that India is considering cutting tariffs on over half of US imports worth $23 billion as part of the first phase of a potential trade deal.
Parliamentary Committee’s Recommendations
Last week, an Indian parliamentary committee recommended tariff reductions on raw material imports to support local manufacturers. The latest duty exemptions align with these recommendations, ensuring that Indian businesses remain competitive in the global market.
With these measures, India aims to strengthen its manufacturing sector, attract more investment, and improve its trade relations with global partners.
