FM cuts customs duty on minerals critical for energy transition

New Delhi: Finance Minister Nirmala Sitharaman on Tuesday announced a cut in customs duty on minerals such as lithium, copper and cobalt, which are critical for nuclear energy, renewable and other sectors, to give a fillip to the energy transition.

In her budget speech in Lok Sabha, Sitharaman recalled that in the interim budget she had announced a strategy to sustain high and more resource-efficient economic growth, along with energy security in terms of availability, accessibility and affordability.

“We will bring out a policy document on appropriate energy transition pathways that balances the imperatives of employment, growth and environmental sustainability,” she said.

Noting that minerals such as lithium, copper, cobalt and rare earth elements are critical for sectors like nuclear energy, renewable energy, space, defence, telecommunications, and high-tech electronics, she proposed to fully exempt customs duties on 25 critical minerals and reduce BCD (basic customs duty) on two of them.

This will provide a major fillip to the processing and refining of such minerals and help secure their availability for these strategic and important sectors, she said.

She stated that energy transition is critical in the fight against climate change.

To support energy transition, she proposed to expand the list of exempted capital goods for use in the manufacture of solar cells and panels in the country.

Further, she stated that in view of sufficient domestic manufacturing capacity of solar glass and tinned copper interconnect, I propose not to extend the exemption of customs duties provided to them.

Noting that steel and copper are important raw materials and to reduce their cost of production, she proposed to remove the BCD on ferro nickel and blister copper.

“I am also continuing with nil BCD on ferrous scrap and nickel cathode and concessional BCD of 2.5 per cent on copper scrap,” she said.

About the PM Surya Ghar Muft Bijli Yojana, which was rolled out earlier this year, he informed the House that in line with the announcement in the interim budget, PM Surya Ghar Muft Bijli Yojana has been launched to install rooftop solar plants to enable 1 crore households obtain free electricity up to 300 units every month.

The scheme has generated remarkable response with more than 1.28 crore registrations and 14 lakh applications, and we will further encourage it, he stated.

She further stated that a policy for promoting pumped storage projects will be brought out for electricity storage and facilitating smooth integration of the growing share of renewable energy with its variable & intermittent nature in the overall energy mix.

She stated that nuclear energy is expected to form a very significant part of the energy mix for Viksit Bharat.

Towards that pursuit, our government will partner with the private sector for setting up Bharat Small Reactors; research & development of Bharat Small Modular Reactor and research & development of newer technologies for nuclear energy, she informed the House.

The R&D funding announced in the interim budget will be made available for this sector, she added.

The development of indigenous technology for Advanced Ultra Super Critical (AUSC) thermal power plants with much higher efficiency has been completed, she informed the House.