Recently, during the 2025-2026 Union Budget Speech, Finance Minister Nirmala Sitharaman proposed revising the tariffs for solar cells and modules.
The tariff for solar cells will be reduced from 25% to 20%, with an additional 7.5% Agriculture Infrastructure and Development Cess (AIDC) and 2.5% Social Welfare Surcharge (SWS). For solar modules, the tariff will decrease from 40% to 20%, plus 20% AIDC and 4% SWS. The tariff reductions are expected to boost India’s clean tech manufacturing and solar energy sector.
National Manufacturing Mission
The National Manufacturing Mission will encompass large, medium, and small industries. It will provide policy support, a roadmap, and a governance framework for the “Make in India” initiative to further its development.
The mission focuses on clean tech manufacturing, including areas such as solar photovoltaic cells, electric vehicle batteries, electric motors and controllers, electrolyzers, wind turbines, high-voltage transmission equipment, and grid-scale batteries. This aligns with the Indian government’s commitment to climate-friendly development.
Tariff Exemption for Critical Minerals
To support domestic manufacturing, the Finance Minister announced a complete exemption from tariffs for 12 critical minerals, including cobalt powder and scrap, lithium-ion battery scrap, lead, and zinc.
Notably, in the July 2024 budget, a tariff exemption was already implemented for 25 critical minerals. This move aims to ensure a stable supply of critical materials for Indian manufacturing, create jobs, particularly for youth, and enhance the processing capabilities of micro, small, and medium enterprises.
Support for Lithium-Ion Battery Industry
To strengthen the lithium-ion battery sector, the Finance Minister proposed including 35 capital goods used in the manufacturing of electric vehicle batteries and 28 capital goods for mobile phone battery production in the list of duty-free capital goods. This initiative will significantly support domestic production of lithium-ion batteries for electric vehicles and mobile phones in India.
