India must urgently correct distortions in customs duty and GST rates for new-age batteries to build a globally competitive clean tech manufacturing base, according to a whitepaper released on Day 2 of the IVCA GreenReturns Summit 2025. Titled “Catalysing Clean Tech Battery Manufacturing: Strategic Tax Reforms for a Future-ready Industry”, the report has been jointly authored by the Indian Venture and Alternate Capital Association (IVCA), Trilegal, and the Bharat Climate Forum.

A Call For Tax Parity In Next-gen Batteries
The whitepaper argues that India’s clean mobility push now requires deeper policy alignment—especially around import duties and GST rates—so that emerging battery chemistries can scale at par with lithium-ion.

“The government has shown tremendous foresight in promoting green mobility and clean technology,” said Meyyappan Nagappan, Partner at Trilegal. “The whitepaper highlights that the next step is to create greater policy synergy by aligning customs duty and reducing GST on all advanced batteries to 5 per cent. This would help lower battery costs, make EVs more affordable, and accelerate India’s clean energy transition—directly supporting the vision of a sustainable and prosperous future.”

India’s push towards 500 GW of renewable energy and 30 per cent EV penetration by 2030 is expected to dramatically increase the need for advanced energy storage. Domestic battery demand is projected to touch 127 GWh, while global demand is set to triple by the end of the decade.

Capturing even 13 per cent of this global market could unlock an annual opportunity of Rs 1.6 lakh crore (US$19.5 billion) for Indian manufacturers, the report notes.

Import dependence and structural gaps

Nearly all advanced battery cells used in India are imported, with China accounting for 63 per cent of lithium-ion cell supplies. The report warns that this dependence exposes the country to energy security risks and widens the trade deficit.

A key concern is the current customs duty structure, which imposes higher duties on new chemistries such as sodium-ion—despite their potential to reduce reliance on imported materials. Sodium is both abundant and low-cost in India.

The key reform: Align duties to 5%

The whitepaper urges the government to level the fiscal playing field by:

• Aligning customs duty for all advanced battery types to 5 per cent, down from 15 per cent.

• Reducing GST on advanced chemistry cell (ACC) batteries from 18 per cent to 5 per cent, treating them differently from legacy lead-acid batteries.

It further highlights the need to correct the inverted duty structure for batteries used in EVs.

Boosting Make in India and cutting battery costs

If implemented, these reforms could help:

• Cut battery costs by up to 20 per cent, improving EV affordability.

• Create 90–180 jobs per GWh of manufacturing capacity.

• Attract large-scale investments across battery chemistries.

• Strengthen energy security by promoting sodium-ion and other indigenous technologies.

• Improve fiscal revenues through higher income tax collections from expanded manufacturing.

With India entering a decisive phase of its clean energy transition, the authors say the proposed tax corrections will be critical for positioning the country as a global manufacturing hub for next-generation batteries.