Indian budget focuses on recycling to secure lithium battery supply chain

Finance minister Nirmala Sitharaman has submitted the Union Budget for 2025-26, which proposes a customs duty exemption for scrap from lithium-ion batteries and critical minerals.
The Union Minister for Finance and Corporate Affairs, Nirmala Sitharamanc, center, on the way to present her budget, along with Minister of State for Finance, Shri Pankaj Chaudhary, third from left, and the rest of her budget team. | Image: PIB/Govt of India

India’s Union Budget for 2025-26 proposes full exemption from basic customs duty (BCD) for lithium-ion battery and critical mineral scrap, with a view to securing raw materials for domestic lithium battery manufacture. Specifically, cobalt powder and waste and the scrap of lithium-ion batteries; lead, zinc, and 12 more critical minerals will attract no customs duty.

The materials listed would be in addition to 25 critical minerals already exempted from BCD since the July 2024 budget.

Presenting the latest budget, Indian finance minister Nirmala Sitharaman said the exemption would help secure raw material availability for manufacturing in India and promote more youth employment.

In another move to bolster Indian lithium-ion battery production, the budget proposes exempting 35 electric vehicle (EV)-related goods from BCD.

The finance minister announced the government will establish a National Manufacturing Mission to further its “Make in India” drive by providing policy support, execution roadmaps, governance, and a monitoring framework for central and state ministries. The initiative will also support clean tech manufacturing with the aim of improving domestic value addition and building an ecosystem for grid-scale batteries as well as solar cells, EV batteries, motors and controllers, electrolyzers, wind turbines, and very high voltage electricity transmission equipment.

Proposing reduced duties for solar modules and tweaking the tariffs applicable to solar cells, Sitharaman also announced India’s Atomic Energy Act and Civil Liability for Nuclear Damage Act would be amended to encourage private-sector companies to help the nation have five Indian small modular reactors (SMRs) active by 2033 as part of a plan to add at least 100 GW of nuclear capacity by 2047. The government will devote INR 200 billion ($2.3 billion) to the development of SMRs.

Industry feedback

Manikumar Uppala, co founder and chief of industrial engineering at battery recycling startup Metastable Materials, welcomed the proposed exemption of battery scrap from BCD. He said, “Extracting one ton of lithium [from used batteries] requires about 28 tons of end-of-life li-ion batteries, compared to 250 tons of ore or 750 tons of brine. It also takes several months to a few years to refine lithium along with using huge amounts of water.”

Nitin Gupta, CEO and co-founder of e-waste and lithium-ion battery recycler Attero, said, “The proposal to fully exempt basic customs duty (BCD) on cobalt powder, lithium-ion battery waste, and other critical minerals is a crucial step toward securing raw materials for domestic manufacturing and building a self-sufficient supply chain. Additionally, the planned policy on recovering critical minerals from tailings [residue materials] will significantly benefit refining players like Attero.”

Sameer Gupta, chairman of energy and industrial technology business Jakson Group, said, “The new manufacturing mission, under Make in India, is a defining step toward building India’s self-sufficiency in solar, hydrogen, and [energy] storage technologies. By fostering an integrated ecosystem, we are not just reducing import dependence but creating a foundation for India to lead the global clean energy revolution.”

Amit Paithankar, whole-time director and CEO of solar module manufacturer Waaree Energies, said, “The inclusion of lithium-ion battery manufacturing incentives and duty exemptions on key raw materials like cobalt and lithium will accelerate India’s emergence as a global hub for energy storage solutions, furthering the EV and solar industries.”

From pv magazine India.

Written by

Comments

Your email address will not be published. Required fields are marked *

Cancel reply
Please enter your comment.
Please enter your name.

This website uses cookies to anonymously count visitor numbers. View our privacy policy.

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.

Close