CBIC Revises Basic Customs Duty Exemption for Lithium-Ion Cell Manufacturing Machinery: Notification No. 27/2026-Customs
Overview
The Ministry of Finance, Department of Revenue, has issued Notification No. 27/2026-Customs dated 8th July, 2026, exercising powers granted under sub-section (1) of section 25 of the Customs Act, 1962. Through this notification, the Central Government has introduced a comprehensive revision to the longstanding Notification No. 25/2002-Customs dated 1st March, 2002, specifically replacing the entries at Serial Nos. 69 and 69A in the exemption table with an extensively expanded and updated list of capital equipment used in the manufacture of lithium-ion cells.
This move signals a clear policy intent to deepen domestic manufacturing capabilities in the energy storage sector, particularly at a time when India's electric vehicle and renewable energy ecosystems are scaling rapidly. By broadening the scope of Basic Customs Duty (BCD) exemptions applicable to specialised manufacturing machinery, the government is effectively reducing the cost burden on manufacturers who import critical production equipment not yet available domestically.
Legal Basis and Notification Background
The Central Government issued this notification on being satisfied that it is necessary in the public interest to do so — a standard threshold under section 25(1) of the Customs Act, 1962 (52 of 1962).
The principal notification No. 25/2002-Customs, originally published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 122(E), dated 1st March, 2002, has been amended several times over the decades. The most recent amendment prior to this one was made through Notification No. 01/2026-Customs, dated 1st February, 2026, vide number G.S.R. 82(E), dated 1st February, 2026.
The present notification, identified as G.S.R. 601(E), substitutes Serial Nos. 69 and 69A entirely, replacing them with a single consolidated entry — Serial No. 69 — covering 84 categories of equipment used across various stages of lithium-ion cell production.
Key Takeaway: The substitution of Serial Nos. 69 and 69A with a new comprehensive entry under Serial No. 69 consolidates and expands the exemption coverage significantly, bringing a wider array of manufacturing equipment within the ambit of BCD exemption.
Why This Notification Matters
Lithium-ion cells are the foundational building block of batteries used in electric vehicles, grid-scale energy storage, consumer electronics, and industrial applications. India has set ambitious targets for domestic cell manufacturing under schemes like the Production Linked Incentive (PLI) for Advanced Chemistry Cell (ACC) batteries.
However, the capital machinery required for cell manufacturing — ranging from electrode preparation to formation, testing, and packaging — is highly specialised and largely imported. Customs duties on such equipment add substantially to project capital expenditure.
By exempting these machinery categories from BCD under Notification No. 25/2002-Customs, the government makes it considerably more economical for Indian manufacturers to establish and scale cell production facilities.
Complete List of Exempted Equipment Under the Revised Serial No. 69
The substituted entry at Serial No. 69 covers the following machinery and equipment for Lithium-Ion Cell manufacturing, along with their respective tariff classifications: