The Indian government has fully exempted cobalt powder and waste, lithium-ion battery scrap, lead, zinc, and 12 other critical minerals from basic custom duties (BCD) in the Union Budget for the 2025-26 fiscal year.
The 12 exempted critical minerals are antimony, beryllium, bismuth, cobalt, cadmium, molybdenum, rhenium, tantalum, tin, tungsten, zirconium and copper. The removal of custom duties for these materials will cut raw material costs for the domestic recycling industry, raising its competitiveness and prompt investments in new capacities, the government said.
The government has recently approved $1.88bn in funding for its National Critical Mineral Mission to ensure long-term sustainable supply of critical minerals. This is the second straight year that a critical mineral security program has been implemented, with the country looking to secure supplies of minerals.
This policy will enhance domestic availability by enabling the recovery of valuable critical minerals from mining tailings, which will strengthen domestic strategic industries, including clean energy, semiconductors, defence, and space. Investing in research and development for efficient recovery processes will strengthen India's self-reliance in critical mineral supply chains, Union Minister for Mines, GK Reddy said after the budget announcement on 1 February.
The ministry also proposed adding 35 more capital goods for electric vehicle (EV) and 28 additional capital goods for mobile phone battery manufacturing, to lower battery production costs and boost lithium-ion battery production for mobile phones and EVs. The government hopes that these additions will make domestically produced EV more affordable and encourage the country's EV industry expansion by reducing operational costs. Additional capital goods under the Export Promotion Capital Goods Scheme, such as machinery, can be imported without incurring custom duties for production of goods for export.
But there are no changes to the duty structure for primary aluminium, nickel and silicon metals, even though the Indian industry has repeatedly urged the government to cut their duties.
The Indian government has also revised the tariff rate on flat-rolled stainless steel products of 600mm or more in width to 15pc from 22.5pc. Duties on other tubes or pipe fittings of stainless steel has been reduced to 15pc from 25pc in the 2024-25 fiscal year.
