India's budget cuts tariffs on capital goods and raw materials to promote energy transition and address the impact of U.S. tariffs

According to a report by Reuters, India released its annual budget yesterday (1st), reducing tariffs on capital goods and raw materials to decrease reliance on key products for energy transition from China and alleviate cost pressures on exporters affected by U.S. trade policies.

Indian Finance Minister Nirmala Sitharaman stated that India will lower tariffs on capital goods required for processing key minerals and manufacturing lithium-ion batteries, while also eliminating tariffs on sodium antimonate used in solar glass production and the tariffs on rare earth elements sourced from monazite for electromagnets. To support export industries impacted by U.S. punitive tariffs, she implemented tariff concessions on marine products, leather goods, and textiles. India will also simultaneously reduce tariffs on raw materials for aircraft parts used in defense maintenance and tariffs on inputs for the electronics industry.

The report cites analysis indicating that tariff reform is crucial for achieving India's $1 trillion goods export target, believing that lowering input costs will help businesses integrate into global supply chains and attract investment