India’s lithium battery policy focuses on boosting domestic manufacturing, reducing import reliance, and promoting sustainable energy storage. Key initiatives include Production-Linked Incentives (PLIs), FDI allowances, and partnerships for raw material sourcing. The government aims to position India as a global hub for lithium-ion battery production by 2030 while addressing recycling challenges and environmental concerns.
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How Does India Regulate Lithium Battery Manufacturing?
India regulates lithium battery manufacturing through safety certifications (BIS standards), import/export controls, and environmental guidelines. The National Programme on Advanced Chemistry Cell (ACC) Storage allocates $2.4 billion to incentivize gigafactories. Manufacturers must comply with battery waste management rules (2022) mandating 70% recycling efficiency for lithium batteries by FY2025.
The Bureau of Indian Standards (BIS) has implemented IS 16046:2018 for lithium-ion batteries, aligning with international IEC 62133 norms. Manufacturers undergo rigorous testing for thermal stability and short-circuit resilience. In 2023, 15% of imported battery consignments failed compliance checks, prompting stricter customs inspections. The ACC program has approved eight manufacturing proposals worth ₹18,000 crore, targeting 50 GWh capacity by 2025. New environmental amendments require gigafactories to install real-time pollution monitors and maintain 500-meter buffer zones from residential areas. State governments like Karnataka and Tamil Nadu are developing specialized industrial corridors with tax rebates up to 25% for compliant manufacturers.
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What Incentives Exist for Lithium Battery Manufacturers?
| Incentive Type | Details | Benefit |
|---|---|---|
| Capital Subsidy | 25% under FAME-II | Reduces setup costs for EV battery plants |
| Tax Holidays | SEZ units | 5-year income tax exemption |
| GST Reduction | 18% on cells | Input tax credit advantages |
| PLI Schemes | $24/kWh for ACC | Boosts production scalability |
What Are the Challenges in India’s Lithium Policy?
Key challenges include limited technical expertise, high capital costs, inadequate processing infrastructure, safety concerns, and Chinese market dominance.
India needs over 15,000 trained battery engineers by 2025 to meet industry demands. Gigafactory investments remain prohibitive – a 1 GWh plant requires ₹3,200 crore with 7-year payback periods. Despite lithium discoveries, 78% of processed compounds are imported due to underdeveloped refining facilities. Safety protocols were overhauled after a 2023 fire at a Gujarat storage facility caused ₹120 crore damages. Chinese suppliers maintain dominance through aggressive pricing strategies, increasing lithium hydroxide exports to India by 62% in 2023. The government is countering these challenges through skill development programs and strategic anti-dumping duties ranging from 15-30% on certain battery components.
Expert Views
“India’s lithium strategy needs three pillars: secured raw materials, scalable recycling ecosystems, and skilled workforce development. Our pilot projects show solvent-free electrode manufacturing can reduce battery costs by 18%, but policy must evolve faster than technology,” says Dr. Ravi Choudhary, Director of India Energy Storage Alliance.
Conclusion
India’s lithium battery policy balances economic ambition with environmental responsibility. While PLI schemes and mineral discoveries provide momentum, success hinges on developing integrated supply chains, standardizing safety protocols, and fostering global partnerships. The 2025-2030 period will be critical for achieving 50-60 GWh domestic manufacturing capacity and meeting 120 GWh EV battery demand projections.
FAQs
- Q: Are lithium batteries banned in India?
- A: No, but imports require BIS certification. Only non-certified/defective batteries face restrictions under Rule 16(1) of Battery Waste Management Rules.
- Q: What’s India’s lithium-ion battery production capacity?
- A: Current capacity is 2.3 GWh across 12 plants. Projected to reach 50 GWh by 2027 with 4 new gigafactories.
- Q: Can I start a lithium battery business in India?
- A: Yes, with minimum ₹50 lakh capital and EPR certification. MSMEs get 15% additional subsidy in North-Eastern states.