Critical mineral strategy: Boost for EV sector but experts flag policy gaps

To position India as a key manufacturing hub for advanced technologies like electric vehicles (EVs) and energy storage systems, Finance Minister Nirmala Sitharaman on Tuesday removed the Customs duty on 25 critical minerals, including lithium, nickel, copper, and cobalt.

- NITIN KUMAR

The Centre has also extended the concessional Customs duty of 5 per cent on Li-ion (lithium-ion) cells until March 2026 and launched the Critical Mineral Mission (CMM) for domestic production and recycling of critical minerals.

Although industry executives believe that the relaxation of import terms and CMM are poised to bolster the government's Make in India initiative, they think the benefits will only be realised in the long term. They also say that the Budget missed providing short-term relief to the industry.

"While the Customs duty exemption on lithium is a welcome move, some announcements on incentives to boost the EV ecosystem in the country and bolster higher EV adoption would have been appreciated," Jayadev Galla, chairman and managing director of Amara Raja Energy & Mobility, said in a post on X.

While the Centre's move is expected to reduce vehicle costs in the long term, sector experts believe it will have minimal impact in the short term.