Is It Cheaper to Purchase an Electric Vehicle in India? The Government Makes a Significant Choice!

Delhi, New Delhi: In India, the market for electric cars (EVs) is expanding quickly. The Indian government has been making smart policy choices to encourage the use of EVs. On March 25, 2025, Finance Minister Nirmala Sitharaman made a significant announcement: the government will eliminate import taxes on 35 capital goods that are needed in the manufacture of electric vehicle batteries.

No Import Tax on Materials for EV Batteries

Finance Minister Nirmala Sitharaman emphasized the government's objective of encouraging domestic manufacturing while simultaneously increasing export competitiveness by lowering import duties on raw materials during the presentation of the Finance Bill 2025 in Parliament.


Currently, 35 necessary components for the production of EV batteries are imported by India. The government hopes to reduce production costs and increase the affordability of electric vehicles for consumers by eliminating import levies on these goods.

The U.S. Reciprocal Tariff's effects 

Additionally, the Indian government is evaluating the effects of the reciprocal tariff policy that U.S. President Donald Trump has stated. According to rumors, on April 2, 2025, the U.S. government would begin imposing reciprocal tariffs on a number of nations.

In the initial stage of its trade agreement with the United States, India intends to negotiate a tariff reduction, according to Reuters. In order to improve trade relations between the two countries, the government is thinking of reducing import taxes on more than ₹1.9 lakh crore ($23 billion) worth of American products.

India Will See a Drop in Prices for Electric Vehicles

In an effort to increase domestic production, a parliamentary committee last week suggested lowering import taxes on basic materials. Now that the import tax on EV batteries has been lifted, the cost of producing electric vehicles will drop dramatically.


This action is anticipated to: 

✔ Lower the cost of electric vehicles in India; 

✔ Promote domestic battery manufacturing, hence decreasing reliance on imports; 

✔ Quicken the uptake of EVs by lowering their price.

The Indian EV market is expected to grow quickly because to government assistance and growing customer demand, making electric mobility more affordable and accessible for millions of people.