Budget 2024: Govt of India scraps import duties on 25 critical minerals
Notable because
Last year, the Government of India identified 30 minerals critical for the energy transition and encouraged mineral exploration through a 25% financial incentive to reduce import dependence and improve supply chain resilience. However, India still faces a nearly 100% import dependence for minerals like lithium, cobalt, and nickel. Lifting import duties can reduce battery manufacturing costs and lower the final cost of electric vehicles, making them competitive vis-a-vis internal combustion engine vehicles (ICEVs).
What to look out for in the months ahead
While slashing import duties makes the commodity cheaper, it does not solve the problem of exposure to geo-political uncertainty. Further, making imports cheaper may also dis-incentivise domestic mineral exploration. Can these policy initiatives improve the competitiveness of clean tech in Indian markets? Further, with battery manufacturing getting cheaper, how can an indigenous battery recycling industry be incubated in India?