The Union government on Tuesday announced that there will be no import duties on key items used to manufacture Electric Vehicle (EV) batteries and mobile phones. The major announcement slashing import duty comes at a time when media reports have hinted at broader tariff cuts to aid local producers withstand the potential impact of reciprocal tariffs threatened by US President Donald Trump.
Ahead of the vote to pass Finance Bill 2025, Finance Minister Nirmala Sitharaman told the Parliament, “We aim to boost domestic production and enhance export competitiveness by reducing duties on raw materials.”
She added that India will exempt import duty on 35 items used to make EV batteries and 28 items used in mobile phone manufacturing.
Governments around the world have been taking slew of measures to mitigate the impact of the US President Donald Trump’s reciprocal tariffs which are slated to take effect from 2nd April.
While the Trump tariffs have strained US’ diplomatic relations with several countries, including some ally nations, the Modi government has been successfully navigating through elaborate talks to resolve tariff issues and ink a win-win bilateral trade pact.
It is pertinent to note that it was earlier reported on Tuesday that the Union government was mulling to slash tariffs on more than half of US imports worth around $23 billion. Citing two government sources, news agency Reuters reported that this was being considered in the first phase of a trade deal that India and the US are currently negotiating.
Also Read: Amid Trump Tariff Row, India’s Trade Deficit Hits 3-Year Low in February
A parliamentary committee, last week, recommended the Union government to reduce tariffs on the import of raw materials in order to support local manufacturers.
While analysts believe India is successfully navigating tariff talks, Trump’s reciprocal tariffs may still have a bearing on India’s imports and exports. Amidst these analytical reports on impact on India’s trade, the latest data compiled by the Ministry of Commerce and Industry revealed that India’s merchandise trade deficit has narrowed to a 3-year low at $14.05 billion in February from $22.99 billion in January as exports held steady during the month while imports declined.
