Electric vehicles will be cheap! Government announced a big tax exemption

Last updated:February 01, 2025, 12:52 IST

The Union Budget 2025-26 has announced significant tax exemption to promote lithium battery production, which will make EV and electronics cheap and reduce import dependence.

New Delhi. The Union Budget 2025-26 has announced a significant tax exemption to promote the production of lithium batteries and its associated areas. The government aims to increase local manufacturing, reduce imports on imports and make electric vehicles (EV) and electronics more economical.

The government has removed basic custom duty (BCD) on essential items like cobalt, lithium-ion battery scraps, lead, zinc and 12 other important minerals. These materials are important for the manufacture of batteries, semiconductors and renewable energy equipment. Due to this, now the input cost of industries dependent on these materials like EV, clean energy and electronics will be reduced.

Will have to be cheaper
Apart from this, 28 other things have been made tax free for 35 other materials and mobile phone battery manufacturing used in EV battery production. With this, now companies will be able to import machines and instruments required for battery manufacturing without imposing additional taxes. It aims to promote local battery production, reduce import dependence and help companies like Tata, Ola Electric and Reliance expand their operations in India.

EV’s battery will be cheaper
This initiative is expected to make EV batteries cheaper, which will make the electric vehicles more economical. This will also reduce the production cost and will promote local manufacturing. This will also reduce India’s dependence on China, will also help in promoting clean energy.