Why this is important to Wisconsin businesses: The latest national budget reduces customs fees for products related to lithium-ion battery production, which could help Wisconsin suppliers in that industry.
India’s new budget could propel the sales of electric vehicles and production of the lithium-ion batteries that power them.
The budget, presented in February, eliminates customs fees on capital goods and machinery imported to manufacture lithium-ion cells for electric vehicles (EVs). Customs charges on the lithium-ion batteries themselves will be cut from 21% to 13%, and subsidies on the batteries will be extended for a year.
The move is expected to reduce the price of EVs, with the hope that will encourage more motorists to switch to the cleaner form of transportation.
Currently, India has to import all the raw materials for the battery cell manufacturing. Even four or five years from now, India will likely still need to import more than 50% of those raw materials from other countries, according to an article published by JMK Research & Analytics and the Institute for Energy Economics and Financial Analysis.
Meanwhile, production of lithium-ion batteries is expected to grow significantly for the automotive sector as well as other industries.
In previous announcements, the government set a goal of installing 450 gigawatts (GW) of renewable energy by 2030—up from 175 GW in 2022—with the capacity to store about one-third of the amount generated. Also, industry efforts are moving toward lithium-ion-based data centers and telecommunications towers.
Wisconsin companies with products and services in the lithium-ion battery and EV industries could find market opportunities to help India meet its goals.