Boost for EV battery manufacturing: 35 additional capital goods come under customs tax exemption

Budget 2025-26

In a move to strengthen domestic manufacturing of lithium-ion batteries, the government has announced an expansion of the list of capital goods eligible for customs tax exemptions, during the Budget presentation on February 1.

The revised list now includes 35 additional capital goods for electric vehicle (EV) battery production and 28 additional capital goods for mobile phone battery manufacturing.

"To the list of exempted capital goods, I propose to add 35 additional capital goods for EV battery manufacturing, and 28 additional capital goods for mobile phone battery manufacturing. This will boost domestic manufacture of lithium-ion battery, both for mobile phones and electric vehicles," Finance Minister Nirmala Sitharaman said.

The initiative is expected to accelerate the growth of the domestic battery industry, reducing reliance on imports and fostering India’s self-sufficiency in battery technology. By easing the cost burden on manufacturers, the exemption aims to enhance the country’s capabilities in lithium-ion battery production, a critical component for the rapidly growing EV and smartphone sectors.