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A Step Forward In Strengthening India’s Green Energy Drive

Budget 2025-26 offers a significant boost to India's green energy transition, particularly by strengthening the lithium-ion battery and EV ecosystem, feels industry leaders

A Step Forward In Strengthening India’s Green Energy Drive

A Step Forward In Strengthening India’s Green Energy Drive
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8 Feb 2025 9:50 AM IST

The duty-free import of manufacturing equipment, coupled with production incentives, positions India to become a global leader in EV and energy storage. Furthermore, the budget's emphasis on "Make in India," through simplified tariff structures and support for local component manufacturing, addresses long-standing industry needs

The proposals made in the Union Budget for 2025-26 will give a boost to the lithium-ion battery and help strengthen the electric vehicle (EV) ecosystem.This is a clear move to bolster India’s green energy transition, experts feel.

Prominent members of Electronics Industries Association of India (ELCINA) say an announcement has been made for allowing duty-free imports for lithium-ion battery manufacturing equipment. Additionally, new incentives have been introduced for the production of EV batteries, with 35 capital goods added for EV battery manufacturing and 28 for mobile phone battery production.

These measures are expected to drive significant growth in the EV sector, which is poised to be a major contributor to India’s clean energy goals. With this support, India is set to become a global leader in EV and energy storage solutions.

The Union Budget 2025-26 also aligns with the government’s long-term ‘Make in India’ vision by correcting inverted duty structures and reducing dependency on imports. The budget supports local component manufacturing and incentivises sectors such as electric vehicles (EVs) and energy storage, which are critical to India’s transition toward a greener and more sustainable future.

The budget also reduces regulatory burdens on importers by amending the Customs (Import of Goods at Concessional Rate of Duty for Specific End Use) Rules, 2022. Key amendments include extending the time limit for fulfilling end-use obligations from six months to one year and replacing monthly compliance filings with quarterly statements. This has been a long standing recommendation from ELCINA and will bring much-needed relief to component manufacturers who need to import inputs at concessional rates.

Dr Sasikumar Gendham, President of ELCINA and Managing Director of Awesense Five, told Bizz Buzz that “the Union Budget 2025-26 has set the stage for India’s rise as a global electronics manufacturing powerhouse. The government's focus on enhancing semiconductor production, increasing support for AI and boosting the PLI scheme will provide a strong foundation for the sector's future growth."

He said the simplified tariff structure and revised duties are steps in the right direction to foster a competitive manufacturing environment in India.

Another key member of ELCINA, its Secretary General Rajoo Goel said: "We welcome the focus on tariff rationalisation and increased funding for key sectors like semiconductors, AI, and EV manufacturing."

He, however, felt that to achieve self-reliance in electronics manufacturing, they have urged the government to introduce a dedicated Component Manufacturing Incentive Scheme and allocate a dedicated fund for the same. This is vital for driving investments in core components.

ELCINA members opine that the measures outlined in the Union Budget 2025-26 will act as a catalyst in realising India’s vision of becoming a global leader in electronics manufacturing and pleaded to maintain this momentum by providing necessary incentives to promote development and manufacturing of components and raw materials.

They feel that the revised enhanced investment and sales turnover limits proposed in the budget are a step in the right direction to strengthen MSMEs. They say by encouraging innovation in high-tech industries, and simplifying trade regulations, the government has laid a solid foundation for the future of India’s electronics sector.

Union Budget 2025-26 electric vehicles lithium-ion battery manufacturing Make in India electronics manufacturing 
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