India plans Rs 13,000 crore in aid to spur battery parts output

India is nearing the rollout of a fresh incentive program for advanced battery cell component makers worth up to Rs 13,000 crore ($1.37 billion), according to people familiar with the program, part of Prime Minister Narendra Modi’s push to close a persistent cost gap with Chinese producers.

While India already provides subsidies for making cells used to power electric cars and for energy storage, the first set of local battery makers have been navigating supply chain snags. That’s why New Delhi is now trying to spur manufacturing of parts that go into cells, said these people, who didn’t want to be identified discussing confidential matters.

The proposal is set to go before the Indian finance ministry’s Expenditure Finance Committee after inter-ministerial consultations, the people said.


The financial support is designed to improve energy security by fostering a battery supply chain locally, which the government sees as a strategic priority. The domestic industry has struggled to compete against much cheaper batteries imported from China, which dominates production globally.

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The proposed incentives cover five key battery components: anode and cathode active materials, electrolytes, separator film and copper foil, the people said. Most battery manufacturers in India currently source those parts from Chinese suppliers, creating what the country’s policymakers view as an unhealthy dependency on an economic and geopolitical rival.

India’s Ministry of Heavy Industries didn’t immediately respond to a request for comment.

Delayed Milestones

The new push builds on an existing 50-gigawatt-hour advanced battery incentive program, which rewards companies setting up giga-scale cell manufacturing facilities. Only 40 GWh had been awarded as of March to recipients including Mukesh Ambani’s renewable energy unit and upstart Ola Electric Mobility Ltd., according to the Ministry of Heavy Industries.

Recipients of those subsidies, however, have been delayed in meeting the production milestones due to technology unavailability, lack of skilled manpower, critical imported equipment or the “non-availability of upstream components,” the ministry said in a Feb. 10 statement.

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Ola Electric has only recently started limited cell manufacturing and expects to scale up capacity to about 6 GWh. The Tata Group as well as the more experienced local battery makers, Exide Industries Ltd. and Amara Raja Energy & Mobility Ltd., are also building or operating cell facilities to meet expected demand, albeit outside the government aid program.