India plans $4.6 billion investment in incentives for EV battery makers
India plans to offer $4.6 billion to incentivise the companies that are looking to establish battery manufacturing facilities. The government seeks to promote the use of electric vehicles and cut down its dependence on oil.
India plans $4.6 billion investment
A proposal drafted by NITI Aayog, a federal think tank chaired by Prime Minister Narendra Modi, said that India could save on oil import bills by as much as $40 billion by 2030 if electric vehicles were widely adopted.
In coming weeks the proposal will be reviewed by the PM Modi’s cabinet said a senior government official. “Currently, the battery energy storage industry is at a very nascent stage in India with investors being a little apprehensive to invest in a sunrise industry,” the proposal said.
India plans to keep its import tax rate of 5% for certain types of batteries, including batteries for electric vehicles, until 2022. It will increase to 15% later to promote local manufacturing.
The annual domestic demand for battery storage and market size at present is less than 50-gigawatt hours and worth just over to $2 billion – could grow to 230-gigawatt hours and more than $14 billion in ten years said the draft proposal.
The proposal estimates it would cost the companies around $6 billion over five years to set up manufacturing facilities with the support of government subsidies.
Recently, the Delhi Government has announced that it will soon introduce a subsidiary plan under its recently launched electric vehicle (EVs) policy for buyers of electric vehicles. In a week it will launch a subsidy program. The government has planned to pay the incentives within two days to the eligible EV buyers in Delhi through a software developed by the ICICI Bank.
The policy is guided by ‘EV Cell’ which presented 5-year roadmap that will see 500,00 EVs on roads of the Delhi. As per the policy, the Delhi government will provide purchase incentives of Rs 30,000 to electric two-wheelers, e-rickshaws, and goods carriers. For electric cars, the purchase incentives range from Rs 10,000 to Rs 150,000.
To get the benefits of this subsidy the electric vehicles must be eligible in terms of performance and efficiency criteria mentioned in the central government’s Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME India Phase II) policy.
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