The announcement by the Central government on Wednesday that capital items and machinery needed for the production of lithium-ion cells for electric vehicle batteries would now be exempt from customs duties was applauded by those involved in the EV industry.
In her statement on the Union Budget for 2023–24, Finance Minister Nirmala Sitharaman stated that the subsidies for EV batteries would be extended for an additional year, making EVs more affordable nationwide.
The Production-Linked Incentive (PLI) scheme for battery manufacture was unveiled by the government in May 2021.
An carmaker must have a minimum investment of Rs 3,000 crore in fixed assets and a global revenue of at least Rs 10,000 crore to be eligible for the Rs 26,058 crore incentives under the PLI scheme for the EV industry.
The government's action was praised by the EV industry and battery companies.
"The proposed customs duty exemptions on the import of capital goods and machinery required for the manufacturing of lithium-ion batteries bring in a new lease of life for all battery manufacturers," said Pankaj Sharma, Co-Founder and Director, Log9 Materials.
As per him, the action would boost the nation's production capacity and provide its ambition of becoming self-sufficient in EV needs the much-needed impetus.
The introduction of a Rs 35,000 crore fund to encourage green initiatives, according to Nirmal K. Minda, Chairman and Managing Director of Uno Minda Ltd, will significantly advance India's net-zero aspirations.
"We look forward to understanding the FM's proposal to reduce the basic customs duty on some goods from 21 per cent to 13 per cent, including lithium and ion cell batteries used in EVs," he said.
By 2030, India's sales of electric two-wheelers are expected to total 22 million as the country's adoption of EVs increases.
Redseer Strategy Consultants' most recent analysis predicts that by 2030, the market for electric two-wheelers will account for more than 80% of all two-wheeler sales.
The pro-EV budget, according to Kalyan C. Korimerla, MD and Co-Promoter, Etrio Automobiles, focuses on critically important initiatives including a reduction in the customs tariff on lithium cells from 21% to 13% and a one-year extension of the subsidies for EV batteries.
"These are welcome initiatives as these will help boost the demand. The policy on the replacement of old polluting vehicles should accelerate the transition towards electric vehicles which is in line with the budget's aim to spur eco-conscious lifestyles," said Korimerla.
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