Budget 2026-27: Customs Duty Exemption Extended on Lithium-Ion Cell Manufacturing

Union Finance Minister Nirmala Sitharaman on Sunday announced an extension of basic customs duty exemption on capital goods used for manufacturing lithium-ion cells for battery storage in the annual budget for the next financial year.

Biogas CNG Excise Duty Calculation Modified

In her Budget speech, she also proposed to exclude the entire value of biogas while calculating excise duty levy on (biogas) blended CNG (compressed natural gas).

Also read: No Fireworks for Auto, but Some Fuel for EVs and Infrastructure

"I propose to extend the basic customs duty exemption given to capital goods used for manufacturing lithium-ion cells for batteries. Also, I propose to exempt basic customs duty on import of sodium anti Monet, for use in manufacturing of solar glass," the FM said.

Duty Relief for Critical Minerals Processing

It is proposed to provide basic customs duty exemption to the import of capital goods required for the processing of critical minerals in India. For biogas blended CNG, she added: "I propose to exclude the entire value of biogas while calculating the central excise duty payable on biogas blended CNG."

She said that the government will develop an integrated East Coast Industrial Corridor with a well-connected node at Durgapur.

Customs Duty Structure Rationalised

Budget proposes to remove exemptions on customs duties on items manufactured in India or have negligible import, she added.

The announcements signal continued government support for domestic battery manufacturing and clean energy infrastructure whilst rationalising the broader customs duty framework.

Poorvodaya States and Northeastern Region Get Infra Boost

About the focus on Poorvodaya states and Northeastern regions, she said, "I propose the development of an integrated east coast industrial corridor with a well-connected node at Durgapur, creation of five tourism destinations in five Poorvodaya states and the provision of 4,000 e-buses, Buddhist sites in the northeastern region."