2020-11-12
Cabinet gives a nod to production-linked incentives schemes for ACC battery and other key sectors

Cabinet gives a nod to production-linked incentives schemes for ACC battery and other key sectors

With the view to bolster the manufacturing capabilities of the country and enhance exports, the Union Cabinet today approved production-linked incentives (PLI) in 10 key sectors including Advanced Chemistry Cell (ACC) battery, under the Atmanirbhar Bharat (Self-reliant India) vision.

The 10 key sectors have received a total financial outlay of INR 1,45,980 crore over a period of five years, of which, ACC battery has been approved a financial outlay of INR 18,100 crores. Automobiles and auto components have been approved INR 57,042 crores.

“The PLI scheme will be implemented by the concerned ministries/departments and will be within the overall financial limits prescribed. The final proposals of PLI for individual sectors will be appraised by the Expenditure Finance Committee (EFC) and approved by the Cabinet,”  the official statement said.

The objective of the PLI scheme across these 10 key specific sectors is to make Indian manufacturers globally competitive, attract investment in the areas of core competency and cutting-edge technology; ensure efficiencies; create economies of scale; enhance exports and make India an integral part of the global supply chain.

ACC battery manufacturing represents one of the largest economic opportunities for several global growth sectors, such as consumer electronics, electric vehicles, and renewable energy. The PLI scheme for the ACC battery sector is expected to incentivize large domestic and international players in establishing a competitive ACC battery set-up in the country. In the auto sector, the PLI scheme aims to make the Indian automotive industry more competitive and enhance the globalization of the automotive sector through the latest incentives.

India Energy Storage Alliance (IESA), the leading industry alliance focused on the advancement of advanced energy storage and e-mobility technologies in India welcomed the PLI scheme announced by the Government of India.

Commenting on the government's move, Dr. Rahul Walawalkar, President, India Energy Storage Alliance (IESA), said, "This is an extraordinary move by the government and is a result of 4+ years of industry push led by IESA and other stakeholders. This national program holds immense importance as it is going to accelerate the Aatamnirbhar Abhiyan in domestic manufacturing, helping India to enter the global value chain for advanced energy storage technologies.”

“We are thankful to Shri. Amitabh Kant and NITI Aayog team for their leadership along with contributions from the Department of Science and Technology (DST), Department of Heavy Industries (DHI), Ministry of New & Renewable Energy (MNRE), and the Ministry of Electronics and Information Technology (MeitY) in shaping this program,” Dr. Walawalkar added.

IESA has been actively working in this space for the past three years, collating information from industry players (IESA member companies) and submitting inputs on the discussion for Advanced Battery Manufacturing in India. 

"Since May 2019, IESA has been in constant communication with the NITI Aayog and other ministries/departments on the launch of the Mission," IESA said in its official statement.  

In July this year, IESA wrote a letter to the PMO requesting to expedite the launch of the Advanced Chemistry Cell - Gigafactory Manufacturing Plan. In September this year, with the view to further accelerate their efforts, IESA banded with industry associations like Indian Electrical & Electronics Manufacturers' Association (IEEMA), India Smart Grid Forum (ISGF), ELCINA, and Maharaja Agrasen Institute of Technology (MAIT) and submitted inputs urging the ministry to take the necessary steps for promoting Advanced Battery Manufacturing in India.

IESA wrote multiple letters to the ministry explaining the urgency of the Mission and the need to avoid delays which could lead to India missing out on investment opportunities to other countries. 

Moving forward, Dr. Walawalkar suggests there is a need for the government to pick some measures for kick-starting deployments of energy storage technologies in a systematic manner that will help investors to commit billions of dollars required for building gigafactories and the rest of the supply chain. This does not necessarily require the government to subsidize the demand, but to identify applications where these technologies are economical and government agencies can save money by adopting the ACC technologies (similar to how the LED rollout was planned through EESL). 

Making SECI a case in point, Dr. Walawalkar proposed as SECI has already identified series of projects and business models for deployment of large-scale renewable hybrid projects, the government can also focus on utilizing energy storage for reducing diesel consumption to help with air quality and pollution reduction.

"IESA is committed to supporting this initiative by bringing together various companies that are ready to invest and are also driving initiatives to accelerate the adoption of energy storage and EVs from the private sector through initiatives such as E$$Meet, MOVE and EV Adopters Club," Dr. Walawalkar added. 

“With the launch of the ACC Battery Manufacturing Mission, we hope that the government will also monitor the progress of these projects and ensure timely completion to help build industry confidence."