The Indian government has taken a significant step towards strengthening the clean energy and electric vehicle (EV) sectors. In Budget 2025, Finance Minister Nirmala Sitharaman announced the exemption of customs duty on cobalt powder & waste, scrap of lithium-ion batteries, Lead, Zinc, and 12 critical minerals, a move expected to accelerate India’s energy transition.
The demand for critical minerals like cobalt, lithium, and nickel is rising due to the global push for green energy and electric mobility. India, aiming to be a global hub for EV manufacturing and renewable energy, faces a challenge—these minerals are not readily available domestically. Reducing import costs through duty exemptions will make battery production more affordable, encouraging local manufacturing and reducing dependency on foreign suppliers.
The government has proposed 100% customs duty exemption on the following materials:
| No. | Material | Use Case | Old BCD (%) | New BCD (%) |
| 1 | Cobalt powder | Used in lithium-ion batteries for EVs | 5 | 0 |
| 2 | Lithium-Ion Battery Waste | Recycling and reuse of battery components | 5 | 0 |
| 3 | Zinc | Essential for battery cathodes | 5 | 0 |
| 4 | Lead | Conductive material for batteries | 5 | 0 |
Rare Earth Elements | ||||
| 1 | Unwrought Tungsten | Used in electronics, aerospace, and defense | 5 | 0 |
| 2 | Unwrought Molybdenum | Used in steel alloys and electronics | 5 | 0 |
| 3 | Unwrought Tantalum | Used in capacitors and electronic devices | 5 | 0 |
| 4 | Unwrought Cobalt | Essential for high-performance batteries | 5 | 0 |
| 5 | Unwrought Bismuth | Used in pharmaceuticals and industrial alloys | 5 | 0 |
| 6 | Unwrought Zirconium Powder | Used in nuclear reactors and electronics | 10 | 0 |
| 7 | Unwrought Antimony Powder | Used in flame retardants and semiconductors | 2.5 | 0 |
| 8 | Unwrought Beryllium Powder | Used in aerospace and military applications | 5 | 0 |
| 9 | Unwrought Hafnium | Essential for nuclear control rods | 10 | 0 |
| 10 | Unwrought Rhenium | Used in high-temperature alloys | 5 | 0 |
| 11 | Unwrought Cadmium Powder | Used in batteries and coatings | 5 | 0 |
| 12 | Wrought Cadmium | Used in solar cells and nuclear applications | 5 | 0 |
Lower EV Costs
Battery prices contribute 30-40% of an EV’s cost. With reduced input costs, EVs could become more affordable for consumers.
Lithium-ion batteries (Cobalt, Lithium-Ion Battery Waste, Zinc, Lead)
Cobalt powder is critical for manufacturing and recycling lithium-ion batteries. These batteries are essential for electric vehicles (EVs), portable electronics, and renewable energy storage systems.
Aerospace & Defense (Unwrought Tungsten, Unwrought Beryllium, Unwrought Hafnium)
Tungsten is used in high-temperature and wear-resistant components in aircraft and missiles.
Beryllium is used in lightweight, high-strength aerospace structures.
Hafnium is crucial for nuclear control rods in submarines and space applications.
Electronics & Semiconductor Industry (Unwrought Tantalum, Unwrought Antimony, Unwrought Cadmium, Wrought Cadmium)
Tantalum is widely used in capacitors for smartphones, computers, and high-performance electronic circuits.
Antimony is used in semiconductors and flame retardants for electronic applications.
Cadmium is essential for solar cells and coatings in electronic devices.
Steel & High-Temperature Alloys (Unwrought Molybdenum, Unwrought Rhenium)
Molybdenum is an important alloying element in steel to improve strength and corrosion resistance.
Rhenium is used in superalloys for jet engines, turbines, and other high-temperature applications.
Nuclear & Energy Sector (Unwrought Zirconium, Powder & Unwrought Hafnium)
Zirconium is essential for nuclear reactor fuel cladding due to its corrosion resistance.
Hafnium is used in nuclear control rods to regulate fission reactions safely.
These materials play a crucial role in modern industries, advancing technology, sustainability, and national security.
Boosting Domestic Manufacturing & Battery Ecosystem –
The exemption will encourage investment in EV battery production, energy storage systems, and battery recycling. This will help reduce import dependency and promote a circular economy for critical minerals.
Strengthening India’s Semiconductor & Electronics Industry –
By making essential materials like tantalum, antimony, and cadmium more affordable, the government will incentivize domestic chip manufacturing, electronics production, and semiconductor industry growth under initiatives like Make in India and Atmanirbhar Bharat.
Promoting Aerospace, Defense, and Nuclear Self-Reliance –
Easier access to tungsten, beryllium, and hafnium will accelerate indigenous defense manufacturing, aircraft production, and space technology advancements. The nuclear sector will also benefit from improved availability of zirconium and hafnium, supporting India's clean energy expansion.
Expanding Steel & High-Temperature Alloy Production –
The exemption will strengthen domestic alloy and special steel industries by reducing costs of key elements like molybdenum and rhenium. This will position India as a hub for advanced metallurgy, benefiting sectors like aerospace, defense, and industrial manufacturing.
Accelerating Renewable Energy & Clean Tech Adoption –
With cost-effective access to critical minerals like cadmium for solar cells and lithium-ion battery components, the government will push for faster adoption of solar energy, energy storage solutions, and sustainable technologies, supporting India's transition to a green economy.
