Govt to extend key manufacturing plan to promote battery industry

The Centre is looking to extend its phased manufacturing plan (PMP) for promoting indigenous battery manufacturing in the country for supporting electric mobility. PMP was initiated by the Ministry of Electronics & Information Technology for electronics and provided financial incentives, several duty exemptions, and countervailing duty on imports to boost domestic production. 

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. 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. It has also been asked to calibrate GST rates on EVs and their components at global rates. It is also proposed to provide accelerated depreciation to the EV sector. 

The PMP and setting up 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. PMP will aim at 1.8 GWh of battery production in the first phase. Business Standard has reviewed the minutes of the meeting held in December last year. 

In the PMP for lithium-ion (Li-ion) batteries, it is proposed by the committee to promote indigenous battery production. Close to 79 per cent of the raw material required for manufacturing Li-on batteries is available in India. The 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.” 

The Ministry of Environment, Forest and Climate Change will design the recycling policy for Li-ion battery. 

The Aayog has also proposed subsidy for 1,000 petrol pumps to set up charging infrastructure in the first round via competitive bidding. 

Among other proposals are a tender for leasing electric buses on a per kilometre basis. The Department of Financial Services has been asked to look at easing financing for EVs, including e-rickshaws and e-autos and component makers.

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