The Department of Heavy Industries has also proposed reducing customs duty on parts of electric vehicles (EVs) to the Finance Ministry
Bharat Heavy Electricals Limited (BHEL) has started talks with a US-based company to form a joint venture in India to manufacture lithium-ion batteries for electric vehicles (EVs), Heavy Industries Minister Anant Geete said on Friday.
According to Geete, India is at present totally dependent on imports for its lithium-ion battery requirements. China is the main importer of lithium-ion batteries, a key component used in electric vehicles, in India.
“Efforts are on towards manufacturing them in India within the next one year,” India Today quoted the Minister as saying.
Geete also said that the Department of Heavy Industries has proposed customs duty cut on parts of electric vehicles (EVs) to the Finance Ministry, which has to take a decision on it.
Currently, the electric vehicle parts are not exempted from import tariff to the Department of Revenue. Key components for EVs including battery, controller, charger, converter, energy monitor, electric compressor and motor attract zero customs duty. However, parts including metals and plastics attract 28 per cent basic customs duty.
Efforts made to boost production of EVs in India
To boost production of EVs in the country, the Heavy Industries Ministry has also suggested defining semi-knocked-down and completely-knocked-down kits used for assembling such vehicles for streamlining of customs duty.
Further, it has proposed a one-year sunset clause to the Finance Ministry along with the Rs 5,500 crore Fame India scheme that entails subsidies for all categories of electric vehicles, strong hybrid cars and for establishing charging infrastructure.
Moreover, the Heavy Industries Ministry has also reportedly drawn up the blueprint for the second phase of FAME India scheme and received the nod for sanction of Rs 5,500 crore from the expenditure finance committee (EFC) under the Finance Ministry in September.
To encourage EV adoption in the country, there is a need for a long-term road-map and vision to encourage domestic manufacturing of lithium-ion batteries.
Currently the plans for assembling batteries, that are underway, will see the cells being imported from China.
Once the BHEL joint venture comes through, the cells will be manufactured in India, a senior official said.
