India 2024-25 budget waives duties on critical minerals

India will reduce or remove custom duties for 25 critical minerals and blister copper but the government is maintaining its tax on copper scrap.

A full list of the 25 critical minerals was not announced but India's finance minister Nirmala Sitharaman said in her 2024-25 fiscal year budget speech today that lithium, copper, cobalt and rare earths are crucial for sectors like nuclear energy, renewable energy, space, defence, telecommunications and high-tech electronics. Out of the 25 critical minerals to be exempt from the custom duties, 23 will be fully exempt and two will have their duty cut.

The Indian government is also launching a critical mineral mission aimed at strengthening the supply chain for essential minerals. This is to encourage the private and public sectors to boost their long-term competitiveness.

Customs duties on precious metals like gold and silver have been reduced to 6pc, while platinum is cut to 6.4pc.

India has waived the 2.5pc basic customs duty on ferro-nickel to enhance the domestic production cost efficiency of stainless steel, with it currently import dependent to meet domestic demand.

The concessional customs duty on copper scrap remains at 2.5pc, while the duty on blister copper has been reduced to zero from its previous 2.5pc. This adjustment aims to support the copper industry by reducing imports.

The government has continued the zero custom duty on ferrous scrap and nickel cathode in a bid to support to achieving net-zero carbon emissions.

A carbon market will be set up for India's hard-to-abate steel and cement sector, Sitharaman said. The government is working towards launching a domestic compliance carbon market by the end of this year to ensure firms keep to their greenhouse emissions intensity targets, the Carbon Markets Association of India told Argus in May.

By Deepika Singh