In a significant move to bolster domestic manufacturing, the Indian government has announced the removal of import duties on key components used in the production of electric vehicle (EV) batteries and mobile phones. This decision aligns with broader tariff reductions aimed at strengthening local industries and enhancing export competitiveness.
Speaking ahead of the Finance Bill 2025 vote in Parliament, Finance Minister Nirmala Sitharaman stated, “Our objective is to stimulate domestic production and improve export potential by reducing duties on essential raw materials.”
Key Exemptions to Support EV and Mobile Manufacturing
Under the new policy, import duties have been waived on 35 components critical to EV battery production and 28 items essential for mobile phone manufacturing. This initiative is expected to lower production costs, encourage local assembly, and attract investment in India’s growing electronics and electric vehicle sectors.
Strategic Trade Measures Amid US Tariff Concerns
The tariff exemptions come as India prepares to counter the potential economic impact of reciprocal tariffs imposed by US President Donald Trump, set to take effect on April 2. The two nations are currently engaged in negotiations to address trade barriers and finalize a bilateral trade agreement.
A recent Reuters report, citing government sources, revealed that India is considering reducing tariffs on over half of US imports worth $23 billion as part of the initial phase of the trade deal. This follows a parliamentary committee’s recommendation last week urging tariff reductions on raw material imports to support domestic manufacturers.
With these measures, the Indian government aims to strengthen the country’s manufacturing ecosystem, making it more competitive on a global scale while navigating ongoing trade discussions with the United States.
