Govt To Extend Key Manufacturing Plan To Promote Battery Industry

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The committee of secretaries on electric mobility has proposed to provide financial assistance to the domestic battery sector

The Centre is looking to extend its phased manufacturing plan (PMP) for promoting indigenous battery manufacturing in the country to support electric mobility.

PMP was initiated by the Ministry of Electronics & Information Technology for electronics. It provided financial incentives, several duty exemptions, and countervailing duty on imports to boost domestic production.

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At a recent meeting of the committee of secretaries on electric mobility, it was also proposed to provide financial assistance to the domestic battery sector, reported Business Standard. 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.

The Department of Revenue was also asked to calibrate GST rates on EVs and their components at global rates. It was also proposed to provide accelerated depreciation to the EV sector.

The PMP and setting up of gigafactories for battery production would be finalised by the NITI Aayog in consultation with the ministries of power; new and renewable energy; heavy industries; and electronics and IT. The PMP will target 1.8 GWh of battery production in the first phase. 

In the PMP for lithium-ion (Li-ion) batteries, the committee has proposed to promote indigenous battery production. Close to 79 per cent of the raw material required for manufacturing Li-on batteries is available in India. Niti Aayog proposed that recycling of batteries can recover up to 80 per cent of its elements and hence, it should be promoted through a holistic policy on recycling.

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