For the middle class, buying a car is a dream they work tirelessly to achieve. In 2024, over 4.3 million cars were sold in India. With growing environmental concerns, the demand for electric vehicles (EVs) has been rising in recent years. The government has also been taking steps to promote EVs from time to time.
On Tuesday, March 25, Finance Minister Nirmala Sitharaman made a major announcement, stating that the Indian government will not impose import duties on 35 capital goods used in the production of EV batteries.
Government Aims to Boost EV Battery Production in India
While presenting the Finance Bill 2025 in Parliament, the Finance Minister said that the government is reducing import duties on raw materials to encourage domestic manufacturing and strengthen export capabilities. She emphasized that the goal is to boost EV battery production in India and make the country self-reliant.
Currently, India imports 35 such capital goods essential for manufacturing EV batteries. Removing import duties will support Indian companies in production and increase the availability of electric vehicles in the country.
Government Removes Import Duty on EV Batteries
A recent parliamentary committee meeting recommended lowering import duties on raw materials to encourage domestic manufacturing. Acting on this, the government has completely removed import duties on EV batteries and mobile batteries.
This decision will directly benefit consumers, as it is expected to reduce the prices of electric cars and boost the EV industry in India.
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India to Consider Lowering Import Tariffs on US Goods
After Donald Trump’s election as US President, the US announced that from April 2, 2025, it would impose reciprocal tariffs on several countries. Trump has repeatedly mentioned that India imposes high taxes on American products. However, no specific reciprocal tariff has been announced against India so far.
According to a Reuters report, the Indian government is considering reducing tariffs on imported goods worth ₹1.9 lakh crore ($23 billion) from the US as part of the first phase of a trade agreement. This move aims to maintain a balanced trade relationship between the two countries.
With the government’s decision to remove import duties on EV batteries, major car manufacturers are expected to introduce affordable family electric cars across different segments, expanding their market presence.