India plans to offer $4.6 billion in incentives to companies setting up advanced battery manufacturing facilities as it seeks to promote the use of electric vehicles and cut down its dependence on oil, according to a government proposal.
A proposal drafted by NITI Aayog, a federal think tank chaired by Prime Minister Narendra Modi, said India could slash its oil import bills by as much as $40 billion by 2030 if electric vehicles were widely adopted.
The proposal is likely to be reviewed by Modi's cabinet in the coming weeks, said a senior government official, who was not authorized to comment on the matter and declined to be identified. NITI Aayog and the Indian government did not respond to requests for comment.
The think tank recommended incentives of $4.6 billion by 2030 for companies manufacturing advanced batteries, starting with cash and infrastructure incentives of 9 billion rupees ($122 million) in the next financial year which would then be ratcheted up annually.
"Currently, the battery energy storage industry is at a very nascent stage in India with investors being a little apprehensive to invest in a sunrise industry," the proposal said.
India plans to retain its import tax rate of 5 per cent for certain types of batteries, including batteries for electric vehicles, until 2022, but will increase it to 15 per cent thereafter to promote local manufacturing, the document said.