Union Finance Minister Nirmala Sitharaman proposed basic customs duty exemption on capital goods imports required for critical minerals processing during her Lok Sabha presentation. This targeted measure accelerates domestic value addition in strategic minerals essential for defense, electronics, and clean energy sectors.
Strengthening Downstream Mineral Capabilities
The exemption covers processing equipment for rare earths, lithium, cobalt, and other minerals, complementing dedicated rare earth corridors in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu. It reduces setup costs for MSMEs and large processors, enabling full value chain development from mining to refined outputs.
Strategic Import Substitution Impact
By slashing capital costs 10-15%, the reform attracts investment in refining capacity, reducing China’s dominance in global processing (over 85% share). This builds resilience against supply disruptions while supporting EV batteries, semiconductors, renewables, and advanced materials manufacturing.
Synergy with Broader Ecosystem
The initiative aligns with ISM 2.0, electronics scheme expansion to ₹40,000 crore, and chemical parks development. These interconnected measures position India as a trusted global supplier of processed critical minerals, fostering jobs and export growth.
