Reliance New Energy Limited, a subsidiary of Mukesh Ambani-led Reliance Industries Limited, has failed to meet the deadline set under a government initiative aimed at reducing battery imports. As a result, the company may face a penalty of $14.3 million (approximately Rs 1.25 billion), claims Economic Times report.
Reliance New Energy’s failure to achieve the minimum committed capacity within the specified timeline has led to the imposition of the fine. The program required participating companies to reach at least one-quarter of the value addition target within two years and 50% within five years.
In 2022, Reliance New Energy won a bid under the Production Linked Incentive (PLI) scheme introduced by the Modi government to boost domestic battery cell manufacturing. However, the company could not establish the required battery cell plant within the decided time.
The initiative is part of the government’s broader plan to strengthen India’s manufacturing sector and reduce dependency on imports, offering significant subsidies and incentives to participating companies. The program aims to increase the manufacturing sector’s contribution to India’s GDP, which has dropped from 15% in 2014 to a lower percentage by 2023.
Apart from Reliance New Energy, Ola Electric Mobility Ltd and Rajesh Exports also won bids under the PLI scheme to establish battery cell plants. While Ola has reported significant progress and claimed to be on track to meet its production goals, Reliance and Rajesh Exports have failed to meet the two-year targets.
Ola Cell Technologies announced that it had begun trial production in March last year, indicating progress in alignment with government goals.
Sources suggest that Reliance New Energy’s shift in focus toward green hydrogen projects is a key reason for its inability to meet the battery cell manufacturing targets. The company has redirected its resources to this emerging area, which is seen as a highly profitable venture for the future.
The Indian government has introduced several initiatives, including the PLI scheme, to boost the manufacturing sector. While the program has had a positive impact on sectors like smartphone manufacturing, it didn’t deliver expected results in other industries.
The PLI program allocated Rs 181 billion in subsidies for the battery cell manufacturing project, which would be disbursed upon completion of the projects. Despite these incentives, Reliance and other participants struggled to meet the ambitious targets.
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