New Delhi: The demand for electric vehicles (EVs) in India is rising rapidly. To boost the adoption of EVs, the Indian government has been making strategic policy decisions. In a major announcement on March 25, 2025, Finance Minister Nirmala Sitharaman declared that the government will remove import duty on 35 capital goods used in the production of EV batteries.
No Import Duty on EV Battery Materials
During the presentation of the Finance Bill 2025 in Parliament, Finance Minister Nirmala Sitharaman highlighted the government’s goal of promoting domestic manufacturing while also boosting export competitiveness by reducing import duty on raw materials.
India currently imports 35 essential components required for EV battery production. By removing import duties on these items, the government aims to lower manufacturing costs and make electric vehicles more affordable for consumers.
Impact of the U.S. Reciprocal Tariff
The Indian government is also assessing the impact of the upcoming reciprocal tariff policy announced by U.S. President Donald Trump. As per reports, the U.S. government will impose reciprocal tariffs on multiple countries starting April 2, 2025.
According to Reuters, India plans to negotiate a reduction in tariffs during the first phase of its trade deal with the U.S.. The government is considering lowering import duties on over ₹1.9 lakh crore ($23 billion) worth of American imports, which could positively impact trade relations between the two nations.
Electric Cars to Become Cheaper in India
Last week, a Parliamentary Committee proposed reducing import duties on raw materials to boost domestic production. Now, with the removal of import duty on EV batteries, the cost of manufacturing electric cars will decrease significantly.
This move is expected to:
Reduce the price of electric cars in India. Encourage local battery production, reducing dependency on imports. Accelerate the adoption of EVs by making them more affordable.
With government support and rising consumer interest, the Indian EV market is set for rapid growth, making electric mobility more accessible and cost-effective for millions.