Budget 2025 Might See Rs 10,000-Crore Allocation For EV Battery Supply Chain
The scheme could have an outlay of anywhere between Rs 5,000 crore and Rs 10,000 crore, and will be on the lines of the SPECS scheme.
The Union Budget 2025 may consider a boost for the EV battery supply chain, as the industry has moved for a manufacturing scheme, according to people familiar with the matter.
The scheme could have an outlay of anywhere between Rs 5,000 crore and Rs 10,000 crore, and will be on the lines of the SPECS scheme, which was launched by the Ministry of Electronics and IT in 2020.
SPECS stands for Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors, and differs from PLI schemes. While PLI schemes provide incentives on achieving the laid down incremental production and sales target, SPECS provided financial incentive of 25% on capex for an identified list of components.
Further, the Ministry of Heavy Industries is already in-principle agreement for the scheme and the matter now rests with the Finance Ministry to take the final call, according to the people quoted above. The aim of the scheme is to increase domestic value addition in battery manufacturing to levels of 50-60%.
The global EV battery supply chain currently majorly rests with China, but India has helped its cause, with schemes like PLI for advanced chemistry cell battery storage, which was approved by the Cabinet in 2021 with an outlay of Rs 18,100 crore.
However, local EV battery cell manufacturing capabilities are still nascent, India has historically relied on importing cells from Greater China, South Korea and Japan. With newer schemes, India aims to become more self-sufficient to satisfy demand.
According to S&P Global Mobility, India will source 13% of its total EV battery cell demand domestically by 2030.
