NITI Aayog Plans to Call for Companies to Set Up 50-GW Battery Manufacturing Base in India

The government is expected to shortly issue tenders inviting companies to set up 50-GW battery manufacturing base in India at $50-billion investments with striking financial incentives as the Cabinet is projected to deliberate the proposal in a week.

The battery manufacturing programme has been scaled up to 50 GW in a plan sent to Cabinet from 40 GW that was planned previously. The government is expected to offer subsidies and duty cuts. This could comprise reducing minimum alternate tax to half and import and export duty waivers or cuts for eight years for successful bidders, a senior government official said.

According to the ultimate plan, Niti Aayog will pursue proposals from states to recognize locations for plants and on providing duty waivers and exemptions to the battery manufacturers. The states will be asked to reduce state GST, facilitate land acquisition, provide concessional electricity, single-window clearance and environmental clearance.

Once the best proposals are identified, the government think tank will invite bids from companies to set up the plants at identified locations. This is probably the first time Niti Aayog is executing a tendering process of this magnitude as it has always been involved in the planning stage.

“The draft Cabinet note has been prepared and sent,” the government official said. “The timelines are likely to be very stringent. Niti Aayog will have to conclude the bidding in six months from Cabinet approval. As per the proposal, the companies will have to set up the manufacturing facilities by 2022, after which they will get the incentives for eight years till 2030. This clause is being pushed to ensure early setting up of the manufacturing base. A minimum of five locations and maximum of 20 are likely to be identified.”

The large-scale battery manufacturing proposal is aimed at making storage systems competitive in India. Indian companies import batteries and battery cells from countries like China and the US.

With plans to add 175 GW renewable energy generation capacity by 2022 and shift 30% fleet to electric vehicles by 2030, the demand for battery storage is expected to be at 300 GW.