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NEW DELHI, 4 August 2023: NITI Aayog, India’s policy think tank, suggests the adoption of incentives to encourage the processing and refining of minerals used in lithium-ion batteries (LIBs).
The suggested incentives include production-linked incentive (PLI) schemes, tax benefits, and royalties. The aim is to promote the domestic value addition in lithium-ion battery manufacturing and boost the EV battery industry in India.
Additionally, the think tank emphasizes the importance of scaling up LIB recycling infrastructure and exploring earth-abundant alternatives to critical minerals used in advanced carbon composite (ACC) batteries.
NITI Aayog’s Recommendations for Incentives
NITI Aayog advocates for the introduction of production-linked incentives (PLIs), tax benefits, and royalties to support the processing and refining of minerals used in lithium-ion batteries. The goal is to enhance environmentally sustainable waste management practices, reuse, and disposal.
Focus on LIB Recycling Infrastructure
The policy think tank stresses the importance of scaling up LIB recycling infrastructure, complementing mining and extraction efforts for critical minerals. By promoting recycling practices, India can achieve environmentally sustainable practices and contribute to domestic value addition in battery manufacturing.
R&D for Earth-Abundant Alternatives
The NITI Aayog proposes boosting research and development for earth-abundant alternatives to essential minerals used in ACC batteries. This approach will help reduce dependence on imported minerals and encourage domestic innovation in the EV battery industry.
Domestic Value Addition in LIB Pack Manufacturing
The production of Li-NMC and LFP active materials from essential mineral precursors can provide up to 12% of domestic value addition in lithium-ion battery pack manufacturing.
India’s EV Battery Industry Growth
India is aggressively transitioning to electric vehicles, with the Indian Li-ion battery market expected to grow from 4 GWh in 2022 to 120 GWh by 2030. The country aims to reduce the emissions intensity of its GDP by 45% by 2030 from the 2005 level.
Challenges in Lithium Reserves
India is currently dependent on importing Li-ion batteries due to skewed concentration of lithium reserves worldwide. Although substantial lithium deposits were discovered in Jammu’s Reasi district, it may take several years to reach commercial production levels.
Government Support and Exemptions
To boost domestic battery manufacturing, the Indian government has announced the exemption of customs duty on the import of capital goods and machinery for li-ion cell manufacturing. Such measures aim to attract investments and facilitate the growth of the EV battery industry.
Focus on Alternative Technologies
In addition to lithium-ion batteries, a few startups in India are exploring alternative technologies to reduce reliance on traditional lithium-based solutions. Startups like Log 9 Materials and ION Energy are at the forefront of such initiatives.
Conclusion
NITI Aayog’s recommendations for incentives and focus on recycling infrastructure and domestic value addition will play a crucial role in bolstering India’s EV battery manufacturing sector. By fostering innovation and research, India can achieve its ambitious goals of embracing electric mobility and reducing carbon emissions in the transportation sector.
Image credit: Zee News
