India – Post Budget Reactions

July 8, 2019 / Media, News & Updates

India Energy Storage Alliance (IESA) congratulates  Smt Nirmala Sitharaman, Minister of Finance on presenting budget 2019-2020 on 5th July 2019 and is excited with the clear focus that Indian Government has brought to the growing field of energy storage and EVs through range of incentives in the budget 2019-20. These incentives can help us achieve the goal of making India a global hub for R&D and manufacturing of advanced energy storage and EVs by 2022. Speaking on the budget, Dr Rahul Walawalkar, President, IESA.

Electric Vehicle

  • Given the need for accelerating adoption of EVs, the GST reduction from 12% to 5% is a welcome move. The income tax deduction up to Rs 2.5 lakh (~$3500) on the interest of the loan to purchase EV will speed up the EV revolution. Govt has set an objective to make India a global hub for manufacturing of EVs including solar electric charging infrastructure
  • Exemption from custom duties for EV components such as e-drive, onboard chargers etc. will help reduce the cost of EVs on road, at the same time, the Phased Manufacturing Plan announced by DHI will also incentivize manufacturers to invest in domestic localization of EVs over next 3 years.
  • Allocation of Rs 10,000 Cr for FAME II incentives to reduce upfront cost of EVs will have immediate impact on boosting the sales of 2W, 3W, Cars and Buses with advanced batteries in India.

Mega investment in Sunrise and Advanced Technology areas

  • It’s a welcome step by GoI to facilitate the setting up of mega manufacturing plants of Li-ion batteries and solar chargers. This is a very important step to ensure energy security for India to avoid over reliance on imports of key components of EVs. We expect that setting up of these giga factories will also help us in expanding market for stationary energy storage projects for supporting renewable integration and reducing usage of diesel for backup power generation. At the same time, IESA urges government to expand the incentives to other advanced energy storage technologies including thermal storage, flow batteries, metal air batteries, fuel cells, super capacitors and mechanical storage technologies such as gravity storage.
  • We are happy that government has identified key raw material supply issues and have reduced custom duties on Cobalt mattes, a key ingredient for advanced li-ion batteries from 5% to 2.5%.
  • The new announcement on section 35 AD of income tax act can help in developing of cutting age energy storage technologies in India. This should create opportunities for exporting Made in India advanced energy storage technologies.


  • The government’s announcement on continued push for start-ups can give a huge impetus on the startup eco system and MSME’s to diversify into EV & storage ecosystems. This is a welcome step and sufficient budget allocation should be provided to them. Focus should also be in removing bureaucratic hurdles that can help entrepreneurs to focus on brining innovative solutions to market.

A Scheme for Promotion of Innovation, Rural industry and Entrepreneurship (ASPIRE)

  • Support for technology incubators under ASPIRE scheme will create opportunities for domestic innovators as well as help attract return of Indian entrepreneurs from around the globe. IESA is working with DST for creating a focused innovation system for industry and academic collaborations around EV and energy storage. Also setting up of National Research Foundation & various incubators can help in commercialization of indigenous technologies.

Swachh Bharat Mission

  • We urge the government for expanding the focus of Swachh Bharat Mission to include e-waste management and also focus on recycling of li-ion batteries. This will further help in securing raw material supply chain for manufacturing of li-ion batteries in India.

UJALA Yojana

  • Govt’ s intention to promote the use of solar stove & battery chargers will create a huge demand for advanced batteries and support the push for getting Giga Factories in India. At the same time this initiative will help to promote sustainable energy for all. IESA is working with various government agencies to ensure that these proposed products can be designed to ensure that such solar stove and batteries  can also help improving power quality and reliability in rural areas.