Electric vehicles are likely to become more affordable with the government fully exempting basic customs duty on materials required for producing lithium-ion batteries.
Industry stakeholders say the proposed measure announced by finance minister Nirmala Sitharaman in the budget will help lower production costs and bolster development of a local manufacturing ecosystem for zero-emission vehicles. Batteries comprise as much as 40% of the cost of producing an electric vehicle and currently they are imported from China and Taiwan.
Nirmal K Minda, chairman and managing director at auto component maker Uno Minda, said the government's emphasis on manufacturing of batteries and components for EVs will significantly enhance domestic manufacturing capacities and reduce import dependence. "Efforts to localise key EV components such as batteries, motors, and controllers will also help lower upfront costs, making EVs more accessible to consumers and strengthening India's EV ecosystem," Minda said.
EV penetration across two-wheeler, passenger vehicle, three-wheeler and commercial vehicle segments stood at 6.1%, 2.4%, 56.6% and 0.99% respectively in calendar year 2024.
The India Electric Vehicle Market is projected to be valued at 54.41 billion USD in 2025 and is anticipated to grow to 110.7 billion USD by 2029, with a CAGR of 19.44% throughout the forecast period (2025-2029). India's electric vehicle sector is undergoing a significant transformation marked by enhanced local production abilities and technological progress.