Customs duty exemption on lithium, cobalt to aid EV sector growth: Auto Inc

The proposed exemption in customs duty on import of lithium, cobalt and other rare minerals in the Union Budget 2024-25 is likely to lower the battery production cost and help in making electric vehicles more affordable for the buyers, auto industry leaders said on Tuesday.

Finance Minister Nirmala Sitharaman while presenting the Union Budget for 2024-25 proposed to fully exempt customs duties on 25 critical minerals and reduce Basic Customs Duty (BCD) on two of them.

"This will provide a major fillip to the processing and refining of such minerals and help secure their availability for these strategic and important sectors," she noted. Minerals such as lithium, copper, cobalt and rare earth elements are critical for sectors like nuclear energy, renewable energy, space, defence, telecommunications, and high-tech electronics, Sitharaman stated.

Auto industry body SIAM President Vinod Aggarwal said the exemption of customs duty on import of lithium, cobalt and other rare minerals and