Govt planed Rs 700 Cr subsidy to boost domestic battery manufacturing

To address the new age technology self-sufficient on new-age batteries and boost its domestic manufacture in the country, the government is mulling to come up with Rs 700 crore direct annual subsidy plan.

As per an estimate, Indian would require close to 600 GWH battery capacity by 2030. To achieve the target, the Centre is looking to extend its phased manufacturing plan (PMP) for promoting indigenous battery manufacturing in the country for supporting electric mobility. The committee recommended to the Department of Revenue that the goods and services tax (GST)/basic Customs duty on the raw materials imported for manufacturing components of electric vehicles (EVs) in India be reduced. It has also been asked to calibrate GST rates on EVs and their components at global rates. It is also proposed to provide accelerated depreciation to the EV sector.

There are several incentive plans including zero import duty and depreciation are looked into to make it attractive for manufacturers. The subsidy will be directly linked to capacity creation, officials said.

The Centre also plans to offer zero-duty import for lithium, iron, and cobalt and the proposals after final consideration will be forwarded to the Cabinet. The govt also plans to subsidize manufacturing up to 50 GWH battery capacity per year. In coming December, the govt will announce competitive bids under the Make in India program.

The government roadmap is to award manufacturing contract by next year, commence production by 2022, and start full-scale production by 2025. It also plans to assist bidders in getting infrastructure.

The batteries that will be manufactured would cater to industries such as electronic vehicles, mobile phones, and consumer electronics. The Indian MNCs including such as Reliance, Adani, JSW, Mahindra and Hero groups have shown a keen interest in the battery pack business.

Other corporates including Suzuki Motor Corp,Panasonic and Toshiba Corp have already unveiled their Li-Ion battery plans for India. The govt has been for past few years asking the car makers in India to innovate, research and work on new technologies to find alternative transport solutions to achieve the plans to have only electric vehicles in India by 2030. The report says, currently, less than 1% of the 200 million vehicles on Indian roads are estimated to be electric vehicles.