The Indian government has announced the removal of import duties on essential parts used in the manufacturing of electric vehicles (EVs) and mobile phones. This decision, announced on Tuesday, aims to support domestic manufacturing and boost exports.
Why Was This Decision Taken?
While explaining the decision, Finance Minister Nirmala Sitharaman said that the government wants to:
✅ Promote domestic production
✅ Increase export competitiveness
✅ Reduce the impact of high tariffs
Before the Finance Ordinance 2025 was passed in Parliament, Sitharaman stated,
“We are reducing import duties on raw materials to support domestic manufacturing and make Indian products more competitive in global markets.”
Key Changes in Import Duties
🔹 EV Battery Production – Import duty removed on 35 essential components used in electric vehicle batteries.
🔹 Mobile Phone Production – Import duty removed on 28 key parts used in manufacturing mobile phones.
Impact on India-US Trade Relations
Previously, a Reuters report mentioned that India was considering reducing tariffs on over $23 billion worth of US imports.
This decision comes amid rising global trade tensions, especially after Donald Trump’s re-election as US President. He recently announced “reciprocal tariffs” starting April 2, increasing the chances of a global trade war.
By removing import duties, India is signaling its willingness to negotiate with the US while also boosting local manufacturing. A high-level US delegation is expected to discuss trade agreements in the coming weeks.
This move is seen as a strategic step to strengthen India’s industrial growth and international trade relations.
