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Business News/ News / Indian govt proposes billion-dollar subsidy for grid battery makers: Report

Indian govt proposes billion-dollar subsidy for grid battery makers: Report

The Indian government is developing a subsidy program worth $2.63 billion to support domestic production of electricity grid batteries, aiming to decrease reliance on China for imports. The initiative is part of India's shift towards clean energy.

For representation purposes only (
For representation purposes only (

According to a proposal from the power ministry, the Indian government is developing a substantial subsidy program worth billions of dollars to support companies engaged in the production of electricity grid batteries. This initiative is part of the country's shift towards clean energy, as reported by the Financial Times on Wednesday.

As per the Financial Times, a draft proposal outlines a production-linked incentive subsidy scheme in India. Under this scheme, companies would receive 216 billion rupees ($2.63 billion) from 2023 to 2030 to establish battery cell manufacturing capacity within the country. 

The draft plan, reviewed by the FT, recognizes the limitations on expanding coal-based thermal generation due to "international opinion" and environmental considerations, deeming it unfeasible. The power ministry of India has not provided an immediate response to a comment request. According to the draft plan, in addition to facilitating the energy transition, establishing domestic battery cell manufacturing is crucial to decrease India's reliance on competitor China for battery imports.

"If India does not take urgent steps to set up local manufacturing capacity of battery energy storage systems, imperatives of our energy transition would lead to huge imports from China," the proposal document seen by FT said.

Indian researchers are exploring several new chemistries for battery storage to reduce dependence on imports of lithium, the predominant mineral used in batteries today. Most of the raw lithium in the world is now processed into battery-grade chemicals in China.

R.K. Singh, the Union minister for power, new and renewable energy, said on several occasions that given the current high cost of storage, there is a need to boost the manufacturing of storage systems in the country, and a PLI scheme would support the capacity addition.

Finance minister Nirmala Sitharaman announced funding support for the sector to ensure financial viability in the Union Budget 2023-24. 


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Updated: 28 Jun 2023, 09:46 AM IST
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