Budget 2026‑27: Govt Extends Customs Duty Exemption for Capital Goods Used for Li‑Ion Cell Manufacturing

The government has proposed to extend basic customs duty (BCD) exemption on capital goods used for manufacturing lithium-ion cells as part of its push to strengthen India’s clean energy and energy security goals.

Announcing the proposal in the Union Budget on Sunday, Finance Minister Nirmala Sitharaman said the move is aimed at supporting the country’s energy transition while reducing dependence on imports. 

“For energy transition and security. I propose to extend the basic customs duty exemption, given to capital goods used for manufacturing lithium-ion cells for batteries, to those used for manufacturing lithium-ion cells for battery energy storage systems also,” Sitharaman said in her budget speech.

The exemption is expected to lower input costs for domestic manufacturers and promote fresh investments in cell manufacturing for mobility and stationary energy storage applications.

The proposal builds on earlier policy measures, including the production-linked incentive (PLI) scheme for advanced chemistry cell (ACC) batteries, under which the government has sought to create a domestic ecosystem for battery manufacturing.