Amara Raja, Exide shares rise up to 5% after lithium-ion batteries included as 'core auto components'

Shares of battery makers Amara Raja and Exide Industries surged 5 and 4 percent respectively on  26, after the Centre expanded the safe harbour threshold to include lithium-ion batteries to be used in electric or hybrid electric vehicles as 'core auto components', raising the limit to Rs 300 crore from present Rs 200 crore.

The move is expected to benefit battery makers by lowering compliance risks, encouraging investment, and strengthening India’s electric vehicle (EV) ecosystem. Lithium-ion batteries have now been classified as 'core auto components' under the rule, implying that companies importing them can now have their declared transfer prices accepted without heavy scrutiny.

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When companies do business across borders, they may buy and sell goods between their subsidiaries, and the price at which these transactions occur is called the transfer price. Tax authorities closely monitor these prices to ensure companies aren’t manipulating them to shift profits to lower-tax countries.