Union Budget 2023: EVs, clean fuels get a renewed boost

The Union Budget 2023 speech addressed some major concerns for India's progress towards clean energy. The govt is reducing taxes on compressed bio gas that is blended with CNG. This could in-turn reduce the overall cost of CNG. Additionally, the Union Budget cleared that the customs duty exemption is being extended for machinery and lithium-ion cells to keep EV prices in check. 

During the Budget 2023 speech, Finance Minister Nirmala Sitharaman said, "To avoid cascading of taxes on blended compressed natural gas, I propose to exempt excise duty on GST-paid compressed bio gas contained in it. To further provide impetus to green mobility, customs duty exemption is being extended to import of capital goods and machinery required for manufacture of lithium-ion cells for batteries used in electric vehicles."

In the Union Budget 2023, the finance minister is proposing to reduce taxes on compressed bio gas, which is mixed with CNG to make it more eco-friendly. These changes are being introduced to encourage the use of more environmentally-friendly energy sources.

The finance minister claimed that the changes would make it easier for companies to import the machinery and equipment needed to make batteries for electric vehicles. This is also aimed at promoting the use of electric vehicles.

The finance minister also offered relief to smartphone makers. The govt has decided to reduce customs duty on imports of certain parts and inputs like camera lens. This will lead to lower manufacturing costs for made-in-India products. 

Finance Minister Nirmala Sitharaman said, "As a result of various initiatives of the Government, including the Phased Manufacturing programme, mobile phone production in India has increased from 5.8 crore units valued at about ` 18,900 crore in 2014-15 to 31 crore units valued at over ` 2,75,000 crore in the last financial year."

She added, "To further deepen domestic value addition in manufacture of mobile phones, I propose to provide relief in customs duty on import of certain parts and inputs like camera lens and continue the concessional duty on lithium-ion cells for batteries for another year."

Applauding the move by the government, Prabhu Ram, Head - Industry Intelligence Group, CyberMedia Research (CMR) said, "The reduction in customs duty on import of certain component parts for mobile phones is a welcome move, and will provide further impetus to deepen the domestic value addition, and in furthering the development of electronics components ecosystem in India."

He added,"The proposal to set-up 100 labs for developing 5G applications at Indian engineering institutions is a step in the right direction to realize new opportunities that 5G posits, and develop India-specific 5G use cases for education, healthcare and agriculture, amongst others."