The recently unveiled Union Budget 2025 presents numerous aspects to consider, especially regarding the proposed customs duty waiver on critical mineral scrappage aimed at enhancing EV battery manufacturing. A key comparison arises between the reduced import duty on refined critical minerals and that on scrapped critical minerals.
Last year’s budget indicated a waiver on the import duty for critical minerals essential for battery production. While this was a positive step, Attero Recycling CEO Nitin Gupta argues that waiving the Basic Customs Duty (BCD) on scrapped critical minerals is more advantageous, as the import value of scrap is lower than that of refined lithium. This approach also strengthens India’s refining and recycling capabilities, which must be rapidly scaled up in response to new policies.
Gupta explains, “It essentially reduces the need for imports. It adds value to the supply chain. By developing refining infrastructure and capacity domestically, the value addition from scrap to finished products occurs within the country. While it’s not entirely domestic, as it still relies on imports, the overall import value decreases.”
The question remains: will these policies foster a more robust refining ecosystem? Even if India had significant lithium reserves, achieving a resource-independent EV ecosystem necessitates a domestic battery material refining infrastructure. Currently, 80% of EV battery refining occurs in China. Are these policies sufficient to stimulate lithium and cobalt refineries in India?
Gupta believes they are. “This provides supply security, lowers input costs, and encourages more investment in the refining of critical minerals within the country. Attero is a leader in this sector, and I am confident that other players will also invest in establishing refining infrastructure and capacity in India.”
Will recycling companies be pivotal in refining lithium and cobalt? Despite the presence of prominent players like Attero and BatX in the EV battery and electronic waste recycling sectors, India’s mineral refining ecosystem remains significantly underdeveloped. However, Gupta notes that Attero’s facility already incorporates refining capabilities.
“With an in-house refining facility, we advance to the next stage by producing pure output. For refining, we can either utilize refined battery output or import scrap directly,” Gupta states, indicating a newfound incentive to import larger quantities of scrap. Currently, India has minimal manufacturing waste, as companies have yet to scale up battery cell production. “Importing actually enhances our capacity, which we can now significantly increase, thanks to the lower cost of imported waste.
