The Indian government is planning to impose tariffs on import of Lithium-ion cells to boost local production. It also plans to introduce incentives for domestic production, including 100% tax deduction on capital expenditure for the first year, easy financing options, giving companies infrastructure status, cash subsidies and waiving minimum alternative tax. In 2019, the Indian Space Research Organisation developed a Lithium-ion cell technology and shared it freely with indigenous companies.
Aman's key takeaways:
- Currently, India manufactures battery storage packs and imports Lithium-ion cells from China due to low sales of EVs in the country.
- The import tax will encourage indigenous manufacturing of cells, helping India to develop its own EV battery infrastructure.
- Lithium cells are of strategic importance as they are used in many emerging sectors, like EVs, renewables, energy storage and consumer durables.
- India does not want to repeat the story of solar (panel) and mobile sectors where Chinese companies have taken over most sales.
- Growing tensions between the two countries can accelerate the ‘Make in India’ programme.