Indian Budget 2023-24 series: Li-ion Cell Manufacturing
As India shifts towards electrifying the automotive industry, having affordable and new age technologies and components that go into EVs is essential for its widespread acceptance and growth. You can check out the previously posted blog from the Indian Budget 2023-24 series which talks about the plans and incentives for boosting India’s clean energy and green hydrogen sector here. Here are the key announcements and incentives for localization and development of Li-ion cell manufacturing from the budget:
- Import duty on capital goods required for manufacturing cells brought down to nil if imported by 31st March 2024.
- Lower duty of 5% on imported cells continued for one more year.
- Lower duty of 2.5% on specified parts, components, and subparts for use in manufacture of cells continued for one more year.
The Government continues to support the “Make in India” policy and the EV industry by ensuring local cell manufacturing.
The import duty on capital goods required for manufacturing cells being brought down to nil, if imported by 31st March 2024, and the lower duty of 5% on imported cells continued for one more year will support India’s ambitions for having localized giga-sized cell manufacturing, thereby catering to the cost-conscious Indian automotive market.
The requirement for cells in India by 2030 is projected to be approximately 220 GWh, and the capacity ramp up planned by Indian cell manufacturers by 2030 is approximately 140 GWh. This shows that India will have rising demand for battery cells and has scope and potential for immense growth in the coming few years and is on track to emerge as a top player in the Li-ion cell and battery industry worldwide. This will be instrumental and will increase the competitiveness of Indian manufacturers and drive the demand for automobiles especially EVs.
The “Make in India” policy has proven to be beneficial for companies in the past. The lower duty of 2.5% on specified parts, components, and sub-parts for use in the manufacture of cells continued for one more year will attract global automotive companies to invest in the Indian market. Countries like China and the USA, who have favored localization, have seen a significant increase in sales for electric vehicles due to factors such as reduced costs. In China, the government’s focus on promoting local manufacturing has led to the growth of local automakers and an increase in the sales of electric vehicles and reduction in costs.
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