Published: 9 Jul 2026
Government Expands Duty-Free Equipment List for Lithium-Ion Battery Manufacturers
OMEGA QMS | Regulatory Intelligence
REGULATORY UPDATE | NOTIFICATION NO. 27/2026-CUSTOMS, DATED 8 JULY 2026
The Ministry of Finance has significantly expanded the list of capital goods that can be imported exempt from basic customs duty (BCD) for the manufacture of lithium-ion cells in India. Notification No. 27/2026-Customs, dated 8 July 2026, amends the longstanding customs exemption notification (No. 25/2002-Customs dated 1 March 2002) by replacing the earlier equipment entries with a consolidated and expanded list of 85 specific machine types. The notification is already in effect.
The Notification
What Has Been Announced
The Central Government, exercising powers under sub-section (1) of Section 25 of the Customs Act, 1962, has issued Notification No. 27/2026-Customs (F. No. 190354/81/2026-TRU) dated 8 July 2026.
The notification amends the TABLE in Notification No. 25/2002-Customs, dated 1 March 2002 (published as G.S.R. 122(E)), which is the principal customs duty exemption notification.
The amendment substitutes the earlier S. Nos. 69 and 69A (which were introduced via Notification No. 11/2025-Customs dated 1 February 2025 and last amended via Notification No. 01/2026-Customs dated 1 February 2026) with a single, consolidated S. No. 69 containing 85 categories of capital goods. Column (3) of the new entry identifies the end-use product as “Lithium Ion Cell.”
What Is Covered
85 Machine Types Across the Entire Cell Manufacturing Chain
The expanded list covers equipment spanning virtually every stage of lithium-ion cell production, from raw material preparation through to final inspection and packaging. The 85 machine types are classified under tariff headings across Chapters 73, 76, 84, 85, 90, and 39 of the Customs Tariff Act.Key categories include:
Key categories include:
- Material preparation: Powder Dryer, Automatic Feeding and Blending System, Slurry Transfer System, Mixing or Agitating Substances Machine
- Electrode manufacturing: Cathode and Anode Extrusion Coating Machines, Cathode and Anode Compression (Cold Press), Negative Electrode Automatic Production and Plate Machines, Electrode Slitting Machine, Electrode Rewinding Machine, Calender Printing Machine
- Cell assembly: Fully Automatic and Semi-Automatic Winding Machines, Stacking Machine, Auto-taping Machine, Tab Transfer Welding and Winding Machine, Jelly Roll Pairing Machine, Mylar Wrapping and Sticking Machines, Load in Can, Top Cover Laser Welding
- Electrolyte and sealing: Auto EL Filling Machine, Electrolyte Injection Machine, Electrolyte Tapping Machine, Auto Degassing Sealing Machine, Nail Inserting and Pulling Machines
- Formation and testing: Formation Machine, Negative Pressure Formation, Cell Formation equipment (capacity, SOC, DCIR), OCV Testing Machine, Constant Temperature Capacity Machine, 1st and 2nd Helium Test equipment
- Welding and cutting: Laser Pin Welding, Laser Notching and Winding, Ultrasonic Welding, Wire Feeding and Rework, Hand Held Electrode Cutter, Foil Slitting Machine, Cell Slicing Machine
- Packaging and inspection: Auto-packing Machine, Auto Magazine Load Machine, Cell Sorting Line, Film Wrapping and Final Inspection, Tape Coding
- Environmental and recovery systems: NMP Trapping System, Solvent Recovery System, Heat Recovery System, Effluent Treatment System, Dust Collector
- Support equipment: High Vacuum Pump, Vacuum Oven, Evaporator Re-circulating Chiller, Heating and Pressing Machine for Lithium, Electric Coin Cell Crimper, Separator Coating Machine, Ultrasonic Tray and Gasket Cleaning Machines, Cell Baking and Cooling Machine, Cell Ageing Machine, Fibre Temperature Detection System, Water Sprinkler System, Rack
Each machine type is mapped to a specific tariff item classification, ensuring that importers and customs officers can identify eligible goods without ambiguity.
What It Means for Battery Manufacturers & Importers
Commercial
The BCD exemption on 85 categories of capital goods materially lowers the upfront cost of establishing or expanding lithium-ion cell manufacturing capacity in India. For manufacturers planning new production lines, the exemption eliminates basic customs duty on the most capital-intensive items in the investment, from electrode coating machines to formation and testing systems. This directly improves project economics and shortens payback timelines.
Documentary
Importers must ensure that each consignment is correctly classified under the specific tariff item listed against the relevant machine type in the notification. The exemption is available only for goods falling under the designated tariff headings and intended for use in the manufacture of lithium-ion cells. End-use conditions under the Import of Goods at Concessional Rate of Duty (IGCR) Rules may apply. Importers should verify whether IGCR compliance is required for availing the exemption.
Strategic
The notification is part of India’s broader industrial policy push to build domestic lithium-ion cell manufacturing capacity. The expansion from the earlier, narrower equipment list to a comprehensive 85-item catalogue covering the full cell production chain signals that the government is removing tariff barriers at the equipment level to accelerate investment. Companies evaluating India as a battery manufacturing location should factor this exemption into their capital expenditure models.
Key Insight
The devil in duty exemption notifications is always in the tariff classification. Eighty-five machine types sounds comprehensive, but the exemption applies only to goods falling under the specific tariff items listed against each entry. A machine that performs the same function but is classified under a different tariff heading may not qualify. Importers should match each piece of equipment against the notification’s tariff column before placing orders, not after the goods arrive at the port.
The earlier S. Nos. 69 and 69A have been fully replaced, so any equipment imported under the old entry structure after this notification’s effective date must be assessed against the new consolidated list.
Reference
Notification No. 27/2026-Customs (F. No. 190354/81/2026-TRU), Ministry of Finance (Department of Revenue), Government of India, dated 8 July 2026. Issued under sub-section (1) of Section 25 of the Customs Act, 1962. Amends Notification No. 25/2002-Customs, dated 1 March 2002, published as G.S.R. 122(E). Previous amendment: Notification No. 01/2026-Customs, dated 1 February 2026, published as G.S.R. 82(E).