Govt mulls Rs 700 Cr annual subsidy to boost domestic battery manufacturing

To be 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.

According to a government official aware of the development, 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, added the official.

The Centre also plans to offer zero-duty import for lithium, iron, and cobalt, said an ET report quoting sources. The proposals after final consideration will be forwarded to the Cabinet.

As per an estimate, Indian would require close to 600 GWH battery capacity by 2030.

The govt 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 big companies such as Reliance, Adani, the JSW, the Mahindra and the Hero groups have shown a keen interest in the battery pack business.

Other firms like Suzuki Motor Corp 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.

It plans to have only electric vehicles in India by 2030.

Currently, less than 1% of the 200 million vehicles on Indian roads are estimated to be electric vehicles.