Budget 2024: FM Sitharaman proposes to exempt 25 critical minerals from custom duties

New Delhi: Seeking to support domestic manufacturing, deepen local value addition and promote export competitiveness, Finance Minister Nirmala Sitharaman on Tuesday proposed to fully exempt customs duties on 25 critical minerals and reduce basic custom duty (BCD) on two of them.

"This will provide a major fillip to the processing and refining of such minerals and help secure their availability for these strategic and important sectors," Sitharaman said while presenting the Union Budget in Lok Sabha.

The Minister noted that minerals such as lithium, copper, cobalt and rare earth elements are critical for sectors like nuclear energy, renewable energy, space, defence, telecommunications, and high-tech electronics.

In order to enhance domestic value addition in gold and precious metal jewellery in the country, the Finance Minister proposed to reduce customs duties on gold and silver to 6% and that on platinum to 6.4%.

Commenting on the proposed reduction in duties on gold and silver, MP Ahammed, Chairman, Malabar Group said, "High import duty often leads to increased smuggling of gold through illegal routes, which hampers the growth of the organized retail gold trade and results in revenue losses for the government. It is expected that the duty reduction will drastically cut down gold smuggling , thereby curbing illegal trade and enhancing tax revenues. This reduction benefits organized retail jewellers, consumers, and the government, making it a positive development for all parties involved."

The Budget also proposed to remove the BCD on ferro nickel and blister copper.

"Steel and copper are important raw materials. To reduce their cost of production, I propose to remove the BCD on ferro nickel and blister copper. I am also continuing with nil BCD on ferrous scrap and nickel cathode and concessional BCD of 2.5 per cent on copper scrap," Finance Minister said.

In a bid to increase value addition in the domestic electronics industry, the Minister also proposed to remove the BCD on oxygen free copper for manufacture of resistors.