India Slashes Import Duty On Key Materials Used To Make EV Battery, Mobile Phones

As part of the initiative, 35 essential components used in EV battery manufacturing and 28 items required for mobile phone production will be exempted from import duties.

The decision comes as part of broader tariff adjustments designed to shield local industries from the potential impact of the upcoming US reciprocal tariffs.

Source : Freepik

In a strategic move to strengthen domestic manufacturing and enhance export competitiveness, India announced duty exemptions on key raw materials used in electric vehicle (EV) battery and mobile phone production.

The decision comes as part of broader tariff adjustments designed to shield local industries from the potential impact of the upcoming US reciprocal tariffs, reported Reuters.

"We aim to boost domestic production and enhance export competitiveness by reducing duties on raw materials," Finance Minister Nirmala Sitharaman said in the Parliament on Tuesday ahead of a vote on the Finance Bill 2025.

As part of the initiative, 35 essential components used in EV battery manufacturing and 28 items required for mobile phone production will be exempted from import duties.

A report by The Financial Times on Tuesday revealed that the American President is looking into a two-step strategy to execute his latest tariffs. This could include utilising emergency powers to impose immediate duties on imports as official trade investigations continue. Notably, officials are looking into the legal mechanisms that can help accelerate the tariff imposition.

India-US Trade Talks Amid Tariff Pressures

The tariff reductions align with India's broader strategy to counteract the potential economic effects of US President Donald Trump's reciprocal tariffs, which are set to be enforced from April 2. Both nations are currently engaged in discussions to resolve ongoing trade disputes and negotiate a bilateral trade agreement.

Citing two government sources, a Reuters report on Tuesday revealed that New Delhi is open to reducing tariffs on over half of US imports worth $23 billion as part of the first phase of the proposed trade deal.

Meanwhile, an Indian parliamentary committee recently recommended tariff reductions on imported raw materials to support domestic manufacturers, further reinforcing the government's commitment to strengthening local production capabilities.