Highlighting hurdles in ‘Make in India’ vision amid global market uncertainties, Reliance faces fines for missing battery plant deadlines under India’s PLI scheme, as it has shifted focus to green hydrogen.
Reliance Industries Ltd’s unit, Reliance New Energy Ltd, reportedly risks facing penalties for failing to establish a battery cell manufacturing plant, according to the Economic Times.
The company was awarded a bid in 2022 under the Indian government’s production-linked incentive (PLI) scheme, aimed at boosting local production. However, it now faces potential fines of up to 1.25 billion rupees ($14.3 million) for missing the deadline.
Rajesh Exports Ltd, another company involved in the PLI scheme, is also facing similar penalties for delays in the advanced-chemistry cell programme. These relatively modest fines, while not significant for Reliance or its chairman Mukesh Ambani, highlight the challenges to Prime Minister Narendra Modi’s ‘Make in India’ vision, which seeks to transform India into a manufacturing hub rivaling China.
Under Modi’s push to raise manufacturing’s contribution to GDP, the share of manufacturing has decreased from 15 per cent in 2014 to just 13 per cent in 2023. Although the PLI programme has succeeded in promoting smartphone assembly, the battery cell manufacturing aspect has encountered hurdles.
Reliance, Rajesh Exports, and Ola Electric Mobility Ltd were among the firms selected to build battery plants as part of India’s efforts to reduce electric vehicle (EV) battery imports. The companies were promised subsidies of up to 181 billion rupees for meeting project milestones, including achieving significant local production capacity within set timelines.
However, only Ola has made notable progress, with its unit beginning trial production in March last year.
Reliance has since shifted its focus to green hydrogen, citing uncertainty in the global market and high capital investment requirements as key factors behind the delay. Furthermore, the decreasing cost of lithium-ion batteries globally has made imports more competitive, further dampening domestic demand.
