The Indian government has passed its Finance Bill, which aims to support domestic battery production by exempting certain goods and machinery from import duties. This move is part of the country’s efforts to reduce its dependence on imports and increase its production capacity. The Bill specifically exempts 35 capital goods/machinery for use in the manufacture of lithium-ion batteries for electric vehicles (EVs) and 28 capital goods/machinery for use in the manufacture of lithium-ion batteries for mobile phones from import duties.
India’s battery production landscape is still evolving, with the country’s first gigafactory coming online in 2023. However, demand for batteries is expected to increase, with a 10-fold increase in production capacity expected by 2030. The majority of battery demand in 2024 came from electric 2&3 wheelers, with over 6 GWh estimated. Passenger car EVs were the next largest demand sector, with over 100,000 sold in 2024, a 22% year-on-year increase.
Portables demand in India has also seen strong growth in recent years, with over 148 million mobile phones sold across the country in 2024, accounting for approximately 2.5 GWh of battery demand. By 2030, battery demand from mobile phones is expected to rise over 40%, underscoring the importance of developing a domestic manufacturing capacity for mobile phone batteries.
Overall, the Indian government’s move to exempt certain goods and machinery from import duties is a significant step towards boosting domestic battery production and reducing the country’s dependence on imports. As demand for batteries in India is expected to continue to increase, this move is likely to have a positive impact on the country’s battery production landscape.