In a pivotal move for India’s energy future, Finance Minister Nirmala Sitharaman has announced significant customs duty cuts on essential minerals and expanded support for renewable energy, aiming to boost strategic sectors and advance the country’s energy transition
In a significant move to support India's energy transition and boost key industries, Finance Minister Nirmala Sitharaman announced a reduction in customs duties on essential minerals such as lithium, copper, and cobalt. These minerals are crucial for advancing nuclear energy, renewable energy, and other high-tech sectors.
During her budget speech, Sitharaman emphasized the government’s commitment to achieving high, resource-efficient economic growth while ensuring energy security. “We will soon release a policy document outlining energy transition pathways that address employment, growth, and environmental sustainability,” she stated.
Highlighting the strategic importance of minerals like lithium, copper, cobalt, and rare earth elements, Sitharaman proposed a complete customs duty exemption on 25 critical minerals and a reduction in Basic Customs Duty (BCD) for two of them. This move aims to enhance the processing and refining of these minerals, ensuring their availability for vital sectors such as nuclear energy, renewable energy, space, defense, telecommunications, and high-tech electronics.
To support the broader energy transition, Sitharaman also proposed expanding the list of exempted capital goods used in manufacturing solar cells and panels. Additionally, she noted that due to sufficient domestic production capacity, exemptions on customs duties for solar glass and tinned copper interconnects will not be extended.
Addressing the cost of production for key materials, Sitharaman proposed removing the BCD on ferro nickel and blister copper. She also confirmed that the government will continue to apply nil BCD on ferrous scrap and nickel cathode, and a concessional BCD of 2.5% on copper scrap.
In a notable update, Sitharaman discussed the PM Surya GharMuft Bijli Yojana, a scheme launched earlier this year to install rooftop solar plants for 1 crore households, providing up to 300 units of free electricity per month. The initiative has seen substantial interest, with over 1.28 crore registrations and 14 lakh applications to date.
Further, Sitharaman announced plans to introduce a policy promoting pumped storage projects to aid in electricity storage and facilitate the integration of renewable energy into the national grid. She also highlighted the role of nuclear energy in India's future energy mix and revealed plans to collaborate with the private sector on Bharat Small Reactors and research into new nuclear technologies.
In support of these efforts, R&D funding announced in the interim budget will be allocated to nuclear energy development. Additionally, a joint venture between NTPC and BHEL will establish an 800 MW commercial plant using Advanced Ultra Super Critical (AUSC) technology, with government fiscal support.
Looking ahead, Sitharaman outlined a roadmap for transitioning ‘hard-to-abate’ industries from energy efficiency targets to emission targets. This includes moving from the ‘Perform, Achieve and Trade’ system to an ‘Indian Carbon Market’ model. An investment-grade energy audit will be conducted for traditional micro and small industries in 60 clusters, with financial support provided for cleaner energy adoption and energy efficiency measures.
These announcements mark a decisive step towards India’s ambitious goals for energy transition and economic growth, setting the stage for a more sustainable future.