The Indian government has removed import duties on 35 essential components used in electric vehicle (EV) battery production and 28 critical parts in mobile phone manufacturing. This move is expected to lower costs, boost local production, and make products more affordable for consumers.
Key Highlights of the Policy Change
- Import duties eliminated on 35 EV battery components and 28 mobile phone parts.
- Lower production costs for smartphones and electric vehicles.
- Encourages investment in India’s manufacturing sector.
- Supports ‘Make in India’ initiative to enhance global competitiveness.
- Mitigates impact of US retaliatory tariffs, set to take effect on April 2, 2025.
Government’s Strategic Move Amid Global Trade Shifts
Finance Minister Nirmala Sitharaman announced the import duty exemption before passing the Finance Bill 2025, emphasizing its role in boosting domestic production and improving export competitiveness.
“By reducing duties on raw materials, we aim to strengthen India’s position as a manufacturing leader while making essential products more affordable for consumers.”
Breakdown of Exempted Components
EV Battery Manufacturing (35 Items)
- Lithium-ion battery cells
- Electrolytes and separators
- Battery management systems (BMS)
- Cathode and anode materials
- Thermal insulation materials
Mobile Phone Manufacturing (28 Items)
- Display panels and screens
- Semiconductors and microchips
- Lithium-ion batteries
- Camera modules and sensors
- PCB assemblies and connectors
Impact on the Mobile and EV Industry
1. Lower Prices for Smartphones and EVs
Reduced production costs will allow manufacturers to lower retail prices, making smartphones and electric vehicles more affordable for consumers.
2. Increased Investment in Domestic Manufacturing
The policy change encourages global brands to shift production to India, reducing dependence on imports from China and other markets.
3. Enhanced Global Competitiveness
India aims to position itself as a key manufacturing hub, making it attractive for foreign direct investment (FDI) and boosting exports.
Trade Relations with the US: A Balancing Act
As US retaliatory tariffs take effect, India is proactively mitigating risks by reducing import costs on critical raw materials. India is also in talks with the US to resolve trade disputes and finalize a bilateral trade agreement.
Industry Leaders Applaud the Decision
Tech Sector
According to Rajeev Chandrasekhar, Minister of State for Electronics and IT:
“This will further strengthen India’s smartphone manufacturing ecosystem, benefiting both businesses and consumers.”
EV Industry
Bhavish Aggarwal, CEO of Ola Electric, stated:
“Reducing import duties on battery components will accelerate EV adoption in India by making electric vehicles more affordable.”
What This Means for Consumers
- Lower smartphone and EV prices due to reduced production costs.
- More job opportunities as local manufacturing expands.
- Better quality and innovation in the Indian electronics and EV market.
Conclusion
The removal of import duties on EV battery and mobile phone components marks a major step forward in India’s economic and industrial strategy. This policy not only supports domestic manufacturing but also strengthens India’s position as a global leader in electronics and electric mobility.
With continuous efforts to attract investments and promote local production, India is well on its way to becoming a global manufacturing powerhouse.
