To help boost the burgeoning EV industry in India, the think tank NITI Aayog has issued a proposal detailing plans to offer incentives totalling up to $4.6Bn (€3.9Bn) by 2030 for companies manufacturing advanced batteries.
Following a relatively unsuccessful EV sales year with a total of only 3,400 EVs sold on the subcontinent, and increasing tensions with neighbouring China following a conflict in border regions, a change is imminent in the Indian EV strategy. While decreasing dependence on Chinese vehicle and battery production, the think tank also promises oil import sales slashes of up to $40 billion by 2030, should a wide-scale adoption take place.
Low popularity and investor hesitancy are also directly accounted for in the proposal, which reads: “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.” Further planning for the current battery production industry in India would see serious growth: Currently, India produces less than 50-gigawatt-hours with an industry worth just over to $2 billion. Estimates suggest increasing to 230 gigawatt-hours and more than $14 billion over ten years.
The think tank NITI Aayog is also chaired by prime minister Narendra Modi, which likely adds some weight to their recommendations. For the start, the think tank recommends incentives including cash and infrastructure of 9 billion rupees ($122 million) over the next financial year. This amount would then increase annually.
At the same time, the current battery import tax rate of 5% will remain in place until 2022, when it will be increased to 15% to help prioritize the local manufacturing economy.
On a tangible note, FAME shows successes. As the second phase of the Indian FAME EV subsidy programme, which was implemented in April 2019, nears its midway point, the Indian government took the opportunity to detail progress. A total of 670 electric buses, 241 charging stations were granted under the FAME II scheme for electric vehicles in India.
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