Budget 2024: Government Grants Import Duty Exemption On Lithium-Ion, EV Prices Expected To Come Down

Nirmala Sitharaman, Finance Minister of India, announced that the customs duties on 25 critical earth minerals including lithium, copper, and cobalt will be waived off completely

The cost of lithium-ion batteries constitutes a substantial portion of the overall price of electric cars. In India, these batteries are mostly imported, which has been a major factor driving up prices of EVs. However, with the recent waiver of customs duties on lithium-ion batteries in the Union Budget for 2024, there is a possibility that the prices of electric cars in India will see some decline.

During the announcement of the 2024 Budget, India's Finance Minister Nirmala Sitharaman declared a complete waiver of customs duties on 25 crucial earth minerals, including lithium, copper, and cobalt. This will directly benefit the electric vehicle industry in India, as the prices of these vehicles are expected to decline. Cobalt serves as an important element in a lithium-ion battery because it helps increase the battery density.

Lithium Reserves Found In India

In February 2023, India found its own lithium reserves for the first time in the Salal-Haimana area of the Reasi district of Jammu and Kashmir, estimated at 5.9 million tonnes. Later in May 2023, some lithium reserves were again found in Rajasthan, which is believed to be even bigger than J&K’s reserves. 

However, the extraction and refining of lithium is a highly complex process, and currently, India lacks sufficient infrastructure for these operations. Despite these challenges, these reserves hold the potential to significantly reduce India's dependence on other countries for lithium-ion, thereby potentially lowering EV prices in the future.

Most Affordable EVs In India

India’s EV market has evolved tremendously in the past 3-4 years as the mass-market EV space has expanded to include an array of electric offerings,ranging from small cars to big and flagship electricSUVs/crossovers. Tata has been one of the major contributors in accelerating the growth of electric cars in India, and currently it has the highest number of EVs in its portfolio. Automakers such as MG, Hyundai, Kia, Citroen and Mahindra have also made substantial contributions as well by launching EVs like Comet EV, ZS EV, Ioniq 5, EV6, and eC3.

The list of most affordable electric cars in India starts with the MG Comet EV, which is priced from Rs 6.99 lakh (ex-showroom). Other mass market EVs on offer include the Tata Tiago EV, Tata Punch EV, and Tata Tigor EV.

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