Massive “Make in India” Subsidy Planned for Battery and EV Manufacturing

The chairman of Niti Aayog, Mr. Amitabh Kant is one of the most influential people in the Modi government. He had earlier said that India has missed the bus on solar manufacturing but there was still time for India to become a major manufacturer in the new Electric Vehicle and battery storage industries. Over the past few months, the government of India has been cooking up plans on how to make India a major player in the storage and EV sectors.

While India is a major player in the ICE engine-driven auto industry as of today with most of the cars being sold in the Indian market made by domestic companies, it is not sure that India will maintain the same position when the auto industry transitions to EV from ICE. Other countries especially China have taken a huge lead over India in EVs with their generous subsidies and support to their manufacturing companies. India has to have a clear vision and strategy in order to reap the gains from this paradigm change in the automobile industry. There has been news that the Indian government will support the setting up of 4-5 gigafactories for battery storage to meet the increased demand for batteries from automobile and power storage over the coming decade.

As per recent news, India will lay out a massive package of incentives for the growth of the battery storage and EV industries which could include billions of dollars in capital and operating subsidies to promote Indian manufacturing. The package will be a mix of tax exemptions from income taxes,  cheap loans and other incentives to push manufacturing. It is expected that Niti Aayog is working on a tender that will competitively allow both Indian and foreign manufacturers to come and bid for this package of incentives to set up large manufacturing facilities in India. The government has already given out a FAME package for the demand side with incentives for buying electric cars and setting up of chargers. To ensure that India still is able to cater to the supply side, it is rolling out another huge package. It remains to be seen how successful the supply side package is.

Also, read The Issue of Lead-Acid Batteries in India