Budget 2026 Customs Duty Concessions on Capital Goods for Lithium-ion Battery Manufacturing and Energy Storage

Budget 2026-27 introduces strategic customs duty concessions on capital goods and equipment used for manufacturing lithium-ion battery cells and battery energy storage systems, reducing production costs and improving competitiveness of domestic battery manufacturers. These duty concessions cover specialized equipment including electrode coating machines, cell assembly lines, formation and testing equipment, electrolyte filling systems, and battery management system components. The measure supports India's ambitious goals for electric vehicle adoption, renewable energy integration, and grid-scale energy storage deployment. India currently imports significant portion of lithium-ion batteries for electric vehicles, consumer electronics, and energy storage applications. By incentivizing domestic battery cell manufacturing, Budget 2026 aims to localize battery value chain, reduce forex outgo, create manufacturing jobs, and secure strategic supply chains for energy transition. The customs duty relief complements existing PLI scheme for Advanced Chemistry Cell battery manufacturing and National Programme on Advanced Chemistry Cell Battery Storage. Additional focus on establishing gigafactories for battery production with international technology partnerships. The initiative is crucial for achieving India's electric mobility targets including 30% EV penetration by 2030, supporting renewable energy capacity addition of 500 GW by 2030, and ensuring energy security through domestic battery manufacturing capabilities aligned with global decarbonization commitments.