The NITI Aayog has proposed a draft for companies setting up advanced battery manufacturing facilities as it seeks to promote the use of electric vehicles. A proposal has been drafted by NITI Aayog, chaired by Prime Minister Narendra Modi.The proposal is likely to be reviewed by PM Modi’s cabinet in the coming weeks. The think tank recommended incentives of $4.6 billion by 2030 for companies manufacturing advanced batteries, starting with cash and infrastructure incentives of ₹ 900 crore in the next financial year which would then be ratcheted up annually. It will cut down its dependence on oil. The proposal drafted by NITI Aayog explains government could slash its oil import bill by as much as $40 billion by 2030 if electric vehicles were widely adopted. Though keen to reduce its oil dependence and cut down on pollution, government’s efforts to promote electric vehicles have been stymied by a lack of investment in manufacturing and infrastructure such as charging stations. Just 3,400 electric cars were sold in the world’s second-most populous nation during the last business year, compared to sales of 1.7 million conventional passenger cars. The draft proposal said annual domestic demand for battery storage and market size – currently less than 50 gigawatt hours and worth just over to $2 billion – could grow to 230 gigawatt hours and more than $14 billion in ten years.
The proposal estimates it would cost firms some $6 billion over five years to set up manufacturing facilities with the support of government subsidies.
The proposal is likely to be reviewed by PM Modi’s cabinet in the coming weeks. Niti Aayog and government did not respond to the request to comment. The government will keep the import on battery 5% till 2022 but has plan to increase after that to 15% to promote local manufacturer for certain types of car battery include battery for electric cars.
The policy could benefit makers such as South Korea’s LG Chem and Japan’s Panasonic Corp as well as automakers which have started building EVs in India such as Tata Motors and Mahindra & Mahindra.
