Recently, India’s Finance Minister Nirmala Sitharaman presented the first budget following this year’s Indian elections, outlining specific actions and reforms needed to achieve the “Developed India” (Viksit Bharat) strategic goals. The budget includes a complete exemption from import duties on 25 critical minerals.
These critical minerals include antimony, beryllium, bismuth, cobalt, copper, gallium, germanium, hafnium, indium, lithium, molybdenum, niobium, nickel, potassium, rare earth elements, rhenium, strontium, tantalum, tellurium, tin, tungsten, vanadium, zirconium, selenium, cadmium, and silicon (excluding quartz and silica). According to the budget speech for the fiscal year 2024-2025, the duty reduction aims to lower input costs, deepen value addition, enhance export competitiveness, correct the inverted duty structure, and promote domestic manufacturing, effective from July 24, 2024.
In her budget speech, Nirmala Sitharaman highlighted that minerals like lithium, copper, cobalt, and rare earth elements are crucial for industries such as nuclear energy, renewable energy, aerospace, defense, telecommunications, and high-tech electronics. She proposed a complete exemption from duties on 25 critical minerals and a reduction in basic customs duty (BCD) on two of these minerals. This will significantly boost the processing and refining of these minerals and help ensure supply for these strategically important sectors.
Additionally, the budget proposed a series of duty adjustments for specific industries or particular minerals, including but not limited to: (1) expanding the list of duty-free capital goods used for manufacturing solar cells and panels to support energy transition; (2) reducing the duty on gold and silver to 6% and on platinum to 6.4% to enhance the value-added in the country’s gold and precious metal jewelry; (3) eliminating basic duties on ferronickel and crude copper, continuing zero basic duties on scrap iron and nickel cathodes, and imposing a preferential basic duty of 2.5% on scrap copper to reduce production costs of essential raw materials like steel and copper; (4) conditionally removing basic duties on oxygen-free copper used for manufacturing resistors and exempting basic duties on certain components used in manufacturing connectors to enhance the value-added in the country’s electronics industry.
Nirmala Sitharaman stated that India will establish a critical minerals mission responsible for domestic production, critical minerals recycling, and overseas acquisition of critical mineral assets. Its responsibilities will include technology development, skilled labor, expanding the producer responsibility framework, and appropriate financing mechanisms.
