In a significant move to enhance India’s manufacturing sector, government has announced the full exemption of Basic Customs Duty (BCD) on cobalt powder, scrap from lithium-ion batteries, lead, zinc, and twelve other critical minerals.
This is part of the government’s broader strategy to secure the availability of essential materials for domestic manufacturing.
Continuing Support for the Manufacturing Sector
This move builds on the 2024 Budget, where the government had already exempted the BCD on 25 critical minerals not sourced domestically.
The government reduced the BCD on two other minerals to stimulate their processing, particularly by micro, small, and medium enterprises (MSMEs).
Now, the 2025 Union Budget extends this support further, ensuring the availability of crucial materials for various industries.
Impact on Key Industries
These minerals play a vital role in the production of batteries. They are used in consumer electronics, electric vehicles (EVs), energy storage devices, and other applications.
By exempting customs duties, the government aims to make these materials more accessible and affordable. This will, in turn, support the growth of industries dependent on them.
Boosting the MSME Sector
The measure is also expected to significantly boost the MSME sector, particularly in the field of mineral processing.
MSMEs will benefit from easier access to essential raw materials, enabling them to expand their operations and contribute to India’s manufacturing growth.
Comprehensive Coverage of Critical Minerals
The exemptions also cover waste and scrap of critical minerals. These include antimony, beryllium, bismuth, cobalt, cadmium, molybdenum, rhenium, tantalum, tin, tungsten, zirconium, and copper scrap. These materials will now be included under the relevant tariff items, facilitating smoother import processes.
As reported by inc42.com, the government’s proposal in the Union Budget 2025 aims to strengthen India’s manufacturing capabilities. It also seeks to provide relief to MSMEs and secure the supply of essential minerals. These minerals are crucial for the future of technology and energy sectors.
