Going electric

• India’s decision to exempt import duties on 35 capital goods used in EV battery manufacturing and 28 items used in mobile phone battery manufacturing is a strategic move towards domestic manufacturing and clean technology adoption.
• This move signals a shift in India’s policy towards EV adoption, despite the high cost of batteries, which make up roughly 40% of the vehicle’s cost.
• The lack of indigenous technological capability in battery manufacturing is a significant barrier to EV adoption.
• EVs accounted for 45% of all car registrations in China in 2024, but only 2% of India’s passenger car market.
• India’s long-term success in the EV space depends on its ability to leverage favorable trade policies, invest in research and development, and secure a strong foothold in the global battery ecosystem.