Budget 2023: Boost for EVs as Budget proposes custom duty exemption for production of lithium-ion cells

Budget 2023: Finance Minister Nirmala Sitharaman announced extending customs duty exemptions to import capital goods and machinery required for manufacturing of lithium-ion batteries. This move is aimed at promoting electric mobility in the country.

Budget 2023 Electric Vehicles
Modi government announced a slew of initiatives to boost green mobility in the country

Finance Minister Nirmala Sitharaman presented the Union Budget 2023 in Parliament today. Narendra Modi-led BJP government announced a slew of initiatives to boost green mobility in the country. During the budget speech, Finance Minister announced that to provide impetus to the EV sector, customs duty exemptions will be provided for the production of lithium-ion cells for batteries used in EVs.

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The Union government will provide exemptions to import capital goods and machinery that are required for the manufacturing of lithium-ion cells for batteries used in EVs and other electronic items. Finance Minister also added that concessions on lithium-ion batteries will continue for another year.

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India aims to achieve net-zero carbon emissions by 2070. According to the government, this budget builds on green growth to usher in green industrial and economic transition. This Budget provides Rs 35,000 crore for priority capital investments towards energy transition and net zero objectives, and energy security by the Ministry of Petroleum & Natural Gas.

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The industry representatives are welcoming the government’s move and have started sharing their responses on the Union Budget 2023. Here are some of the responses.

Himanshu Singh Raghuvanshi, Co-Founder & COO, CapGrid, said, “The budget is very thoughtful and driven by market dynamics. Lots of positives coming out on the green energy front. We welcome the decision to the extension of subsidies on EV batteries. Scheme to support state governments and municipalities in replacing their old polluting vehicles will also give sales push to the automotive & EV segment.”

Suhas Rajkumar, Founder and CEO, Simple Energy, said, “The budget for FY24 is encouraging on a lot of fronts, especially in the space we operate in. These progressive schemes will surely enable rapid electrification in the country and encourage consumers to transition seamlessly toward green mobility. Furthermore, we congratulate the Government of India on laying down its aim of reaching net-zero carbon emissions by 2070.”

Samrath Kochar, Founder & CEO of Trontek, said, “The budget is pragmatic and has taken the right steps towards advancing green mobility adoption in the country. Extension of customs duty exemption on Li-ion cells and removal of customs duty on imported machinery used for manufacturing Li-ion cells will bring down the cost of EV batteries thereby promoting EV adoption. Going forward, we are certain that the Government will also look at bringing a PLI scheme for battery pack manufacturers and also reduce GST on batteries to benefit the many MSMEs operating in the EV sector.”

Tushar Chhabhaya, Director, Aarya Automobiles, said, “The budget for 2023 was remarkable in many ways, especially for the automobile sector. The government’s new tax slabs and GST will help people purchase cars by reducing the overall cost, as GST unified the country’s tax structure, making vehicles more affordable by eliminating the cascading effect of multiple taxes.”

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First published on: 01-02-2023 at 13:44 IST