New duty waivers on battery manufacturing equipment are designed to speed up India's gigafactory expansion and cell production.
NEW DELHI: The Department of Revenue issued three separate customs notifications on Wednesday exempting basic customs duty on a range of goods used to manufacture lithium-ion cells, wireless charging modules and select display assemblies, with the concessions remaining valid until March 31, 2029. The most significant of the three expands duty-free machinery imports for battery cell manufacturing to 85 categories of equipment, removing the earlier requirement that machinery be tied to a specific end use such as electric vehicles or mobile phones.
What Change for Battery Makers
The lithium-ion cell notification deserves the most attention among the three, since it addresses a real bottleneck companies have been navigating for years. Previously a company importing coating machines or winding equipment had to specify upfront whether the cells being produced would go into electric vehicles or consumer electronics, creating unnecessary rigidity for manufacturers building flexible production lines. The new rule removes that distinction entirely, covering equipment for slurry mixing, electrode coating, cell welding, electrolyte filling and final testing regardless of what the finished cell is eventually used for. That flexibility matters more than it might sound, since companies like Reliance Industries are targeting a mix of electric vehicle and grid-scale battery storage output from the same manufacturing complex in Jamnagar, and having one unified duty structure instead of two separate ones removes a genuine layer of compliance friction.
The Headlines and the Display Relief
Not every part of Wednesday’s announcement carries equal weight and the display assembly notification is a good example of where the fine print matters more than the summary. The actual notification text explicitly excludes displays for mobile phones, smartwatches, smart meters and television panels. What remains eligible covers automotive, medical and industrial display components instead, a smaller and more specialised slice of the market. This distinction lands squarely on Dixon Technologies, whose new joint venture with Taiwan’s HKC in Noida is targeting 84 million display units annually, the vast majority of them smartphone displays. Only the roughly two million units earmarked for notebooks, automotive and industrial use will actually qualify for the duty waiver, meaning Dixon’s largest revenue line remains governed by the existing calibrated duty framework rather than benefiting from this week’s announcement.
Wireless Charging Gets a Cleaner Win
The second notification covering components used in mobile phone wireless charging modules, offers a more straightforward benefit. It grants duty-free status to a defined list of sub-components, including specialised magnets, copper coils and shielding films that go into building the inductor coil assemblies found in premium smartphones. Apple’s India-based contract manufacturers, along with Samsung’s Noida facility, stand to benefit directly here, since wireless charging has become a standard feature across mid-to-premium smartphone tiers and localising this assembly step reduces the imported component bill on every unit produced domestically.
China Dependence
It would be a mistake to read these notifications as a complete answer to India’s reliance on Chinese battery and electronics supply chains and it is worth being clear-eyed about why. Machinery is only one layer of the cost structure. Active battery materials, meaning the lithium, cobalt, nickel and graphite that actually go into a cell, account for something like 60% to 70% of total production cost and China continues to process the overwhelming majority of the world’s battery-grade chemicals. Waiving duty on the machines that assemble cells does nothing to change where the raw inputs feeding those machines come from. Layered onto that is a genuine technology access problem, since Chinese authorities have tightened export controls on high-performance battery chemistries and delayed visa approvals for the technical experts Indian companies rely on to commission new plants. Exide’s collaboration with SVOLT and Amara Raja’s licensing deal with Gotion both depend, to some extent on this kind of ongoing technical support from Chinese partners.
A Deliberately Tight Deadline
The March 2029 sunset clause attached to all three notifications is worth flagging on its own, since building and stabilising a gigafactory typically takes two to three years from groundbreaking to commercial production. Amara Raja’s first production line in Telangana is not expected to go commercial until mid-2027, leaving less than two years of duty-free imports before the window closes. That tight runway looks like a deliberate policy choice rather than an oversight, designed to push manufacturers to accelerate procurement and construction rather than sit on approved capacity. Given how frequently India’s customs framework has extended similar sunset clauses in the past, industry groups are likely to push for a renewal well before 2029 arrives, particularly if several major gigafactory projects are still mid-construction when that deadline nears.
What to Watch Next
Where this policy genuinely succeeds or falls short will become clearer as domestic cell manufacturers move from equipment installation into actual commercial output over the next two years. The real test lies further upstream, in whether India’s parallel efforts to secure critical mineral supplies and build domestic processing capacity can catch up with the manufacturing capacity these duty waivers are designed to unlock.
About the Author
