India removes import taxes to accelerate green energy uptake

India will scrap import taxes on 25 critical minerals and ramp up efforts to develop small-scale nuclear reactors to accelerate its clean energy transition, Finance Minister Nirmala Sitharaman said in her budget speech on Tuesday.

Import duties will be scrapped on critical minerals like copper, lithium, and cobalt. This aims to make these materials cheaper for domestic manufacturers of renewable energy technologies like solar panels and wind turbines, Sitharaman explained.  The move also aligns with the China-plus-one global strategy, as China currently holds 70 per cent to 90 per cent of the world’s processing capabilities,” Rakesh Surana, partner at Deloitte India, told Reuters.

The government is exploring partnerships with private companies to build reactors locally, while also increasing funding for research and development, Sitharaman said. The minister also said a Critical Mineral Mission would be commenced to boost local refining and recycling as well as acquisitions of assets outside India.

“This initiative also aligns with the China-plus-one global strategy, as currently China holds 70% to 90% of the world’s processing capabilities,” said Rakesh Surana, partner at Deloitte India.

The latest policies follow a 1 trillion-rupee ($12 billion) spending package on sunrise technologies that was unveiled by the government in February.

India also said earlier this year that it hoped to cooperate with France on the development of small, modular reactors. Dozens of companies worldwide are working on these reactors, with most pitched as more flexible and lower-cost than existing plants.

“As part of diversity in the energy mix, there is a role for safe, smaller nuclear,” Hisham Mundol, chief Indian advisor with the Environmental Defense Fund, told Reuters. However, while India is good at mass market innovation and low-cost engineering, “the transformational scientific breakthroughs required to mainstream safe” small-scale nuclear energy are still a long way away, Mundol said.

Attribution: Reuters