Indian govt plans Import tax on Li-ion cells- How it will affect EV industry?


According to the latest reports by top business magazines like hindustantimes, economictimes, Livemint, Indian Govt. is planning to impose a tariff on importing Lithium ion cells for at least 10 years..This decisions is coming after the rising tensions between India and China. Experts believed that this decision was taken as a part of Atma Nirbhar Bharat, the concept introduced by Prime minister Narendra Modi to make India Self reliable. Indian govt. is also planning to offer more incentives and subsidies to boost local manufacturing of Li ion cells and related products.

Experts and officials believe that this is a move from India to tackle the dominance of china in the Lithium cell segment. Lithium cells are the main building blocks of lithium ion batteries, which are used to manufacture Batteries for EV, laptops, mobile phones etc. Currently china is dominating the lithium ion cell manufacturing Globally, and India is looking to become self reliable in this segment within next 5-10 years by Processing of cell raw materials, Manufacturing and selling, which reduces the overall cost of the battery and thus price of EVs.

According to the outline of energy security plans, India issue expression of interest to shortlist some companies to set up Giga factories like Tesla, to manufacture cells and batteries. If this happens it is sufficient to power millions of homes in India and Electric cars.

We also need to check the fact that how this plan will affect the current EV industry in India, As of now most of the companies are importing cells from china and outside India. For a short period of time, this import tariff will affect the EV  growth in India as the price of importing cell will increase and eventually reflect in the price of EV. But on Longer view, Indian companies itself will become the manufacturers of lithium cells and we become self reliable in  EV segment. India cannot depend on any countries for a long period of time, as we need to bring up our indigenous products in every segment for our good growth and self reliability.

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