Battery Manufacturers In India Soon To Get Subsidy And Other Benefits

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  • The government is aiming to subsidise the creation of up to 50-gigawatt-hours of battery capacity a year
  • The subsidy proposal is being examined by the Expenditure Finance Committee and will soon be taken to the Cabinet
  • The annual subsidy outgo on this is estimated to be Rs 700 crore
  • The plan seeks to make India self-sufficient in new-age batteries for EVs as also for mobile phones and other consumer electronics

India in December will be inviting bids from global players to further boost up its clean energy mission. In addition to subsidy benefits for 10 years, it will offer a host of incentives such as depreciation and zero import duty on key inputs. 

A government official told Economic Times that the subsidy proposal is being examined by the Expenditure Finance Committee and will soon be taken to the Cabinet. 

The government is aiming to subsidise the creation of up to 50-gigawatt-hours of battery capacity a year. The annual subsidy outgo on this is estimated to be Rs 700 crore. Zero-duty imports would be allowed for lithium, iron and cobalt to power the advanced cell chemistry in place of the traditional lead batteries. The plan seeks to make the country self-sufficient in new-age batteries for electric vehicles as also for mobile phones and other consumer electronics, significantly reducing the import bill, reported the English Daily.

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Aim to promote new technology
A month back, Niti Aayog has stated that the government will invite bids by December this year and award contracts subsequently. Companies will be given contracts based on their net worth, production capacity, scale-up plan and the extent of localisation.

Any new technology that evolves over the next 10 years will also be eligible for subsidy under the roadmap for battery manufacturing. Once the contracts are awarded, companies would be expected to commence operations by 2022 and gradually scale it up to the full committed capacity by 2025.

The government is eyeing a minimum manufacturing capacity of 5 GWh per contactor and thus a maximum of 10 players could be allowed to set up shop in India through a competitive bidding process. 

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