Ban on battery scrap exports will spur recycling, but dispute over Scotch tariffs could send wrong signalsIndia’s ban on export of lithium battery ‘black mass’ is a smart move. Black mass is a powdery material formed by pulverising innards of batteries past their service life. It contains precious elements – nickel, cobalt, lithium, etc – needed for making new batteries. It’s a veritable mine. So far, it’s been exported because India has meagre battery recycling capacity – some 60,000 tonnes annually. But now that Union cabinet has approved a $300mn incentive policy for increasing domestic processing of nickel and lithium, hoarding this resource makes sense.We’re in the middle of a major electrification drive. While installed solar capacity has multiplied, it needs storage batteries to be useful round the clock. Then there’s the shift to EVs. Govt wants 30% of all vehicles sold 2030 onwards to be electric. That’s going to push up battery demand, increasing dependence on China, primarily, besides suppliers like South Korea. Efforts are on to tap Russian lithium reserves, but black mass can take care of a big part of battery demand. By one estimate, up to 40% of battery materials for EVs in 2040 could come from domestic recyclers. Logic’s simple: EV batteries last up to 10 years, so batteries sold in 2030 could be up for recycling in 2040.What doesn’t sound so smart is the row over Scotch tariffs. Reports say more than 80 containers of bulk Scotch – meant to be blended with IMFL – are stuck because customs is demanding 150% duty, while importers insist tariff should be 75%, as agreed under UK-India trade pact. Indian authorities labour the point that concessional tariff applies only to bottled, ready-to-drink Scotch.They might be right under one interpretation of the trade pact. Just as India’s tax demands against Vodafone and Cairn were “right” under retrospective taxation law, but wrong everywhere else. They brought bad press and put off foreign investors for years.So, Indian authorities should honour trade pacts not just in letter but in spirit. When 80% of Scotch arrives in bulk packaging, it’s reasonable to argue the trade pact – and celebratory headlines – weren’t about the other 20%. Let’s show our trade-friendly side. Other treaties are in the pipeline.
Disclaimer: Views expressed above are the author’s own.