NEW DELHI: The Union Cabinet on Wednesday approved a Rs 18,100 crore production-linked incentive (PLI) scheme for manufacturing of advanced chemistry cell (ACC) battery storage. The government estimates the scheme would lead to manufacturing of up to 50,000 MW capacity of battery storage in India with foreign and domestic manufacturers investing Rs 45,000 crore in the sector.
Announcing the scheme, Prakash Javadekar, the Minister of Environment, Forest and Climate Change; Information and Broadcasting; and Heavy Industries and Public Enterprises, said that the country currently imports battery equipment worth Rs 20,000 crore a year. The PLI scheme will not only decrease India’s import dependence but would also boost local manufacturing.
“Incentive based on sales, energy efficiency and localisation,” Javdekar added. The latest announcement is a part of the Rs 1.97 lakh crore PLI schemes for 13 key sectors to create national manufacturing champions and generate employment opportunities for the country’s youth. Launched last year, initially for mobile manufacturers and pharma ingredient manufacturers, the scheme has been extended to sectors such as telecom and networking products, food products, white goods, solar PV modules, auto and auto components, textile, etc.
The scheme extends an incentive of 4-6 per cent on incremental sales for a period of five years subsequent to the base year. The strategy behind the scheme is to offer companies incentives on incremental sales from products manufactured in India. The scheme has been designed to boost domestic manufacturing in sunrise and strategic sectors, curb cheaper imports and reduce import bills, improve cost competitiveness of domestically manufactured goods, and enhance domestic capacity and exports.
Welcoming the move, the Society of Manufacturers of Electric Vehicles (SMEV) said that the new incentive will help in bringing down the cost of electrical vehicles.“Battery occupies a larger portion of any electric vehicle’s cost. Thus, the policy move will help us steer towards green growth in the industry, while exponentially increasing our manufacturing capacity,” said SMEV Director General Sohinder Gill in a statement. Once battery manufacturing operations kick off in the country, the prices will eventually come down, he added.