Incentives needed to boost indigenous manufacturing of battery components: CEA

New Delhi: The centre should introduce targeted incentives to boost domestic manufacturing of critical
battery components
such as anodes, cathodes, and electrolyte salts to reduce import dependency and strengthen the energy storage ecosystem, according to recommendations made at a recent Central Electricity Authority (CEA) workshop.
Held in Delhi on May 8, 2025, the national workshop on 'Renewable Energy (RE) Integration through
Energy Storage Systems
(ESS)' brought together stakeholders from government, industry, and research institutions to identify bottlenecks and propose actionable solutions to promote battery manufacturing.
Participants noted that while India has made progress in cell manufacturing, the country remains heavily dependent on imports for key components like cathode and anode materials, separators, electrolytes, and battery management systems. The absence of local manufacturing for these parts increases project costs and raises supply chain risks.
'There is a need to promote local manufacturing of critical battery components and create a domestic ecosystem to ensure long-term sustainability of the battery energy storage sector,' the workshop report stated.
The workshop underlined that incentives for domestic manufacturing of battery components are critical to drive scale and bring down costs. These include demand aggregation mechanisms, viability gap funding (VGF), and targeted support through the Production Linked Incentive (PLI) scheme.
The discussion also highlighted the need to integrate the
battery value chain
with India's broader industrial ecosystem and raw material sourcing strategy. 'Currently, about 90 per cent of
critical minerals
required for cell production are imported. India must secure long-term supplies through global partnerships, mineral exploration, and recycling,' the report noted.
On technology front, stakeholders emphasised the need to support indigenous R&D and develop alternatives to lithium-ion chemistry. With significant interest in sodium-ion, zinc-ion, and flow battery technologies, experts called for increased government funding for pilot projects and testing infrastructure.
The workshop concluded with a call for a multi-pronged strategy involving incentives, regulatory clarity, and public-private partnerships to develop a robust and self-reliant battery manufacturing ecosystem.
The workshop was attended by officials from the Ministry of Power, Ministry of Mines, Bureau of Energy Efficiency (BEE), NITI Aayog, NTPC, SECI, industry leaders, and battery manufacturers. The initiative was part of India's efforts to scale up battery energy storage to support the 500 GW non-fossil fuel target by 2030.

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Mint

7 hours ago

• Mint

After assembling 99% of its phones, India faces a harder manufacturing test

New Delhi: Over the past decade, India's electronics manufacturing sector has been defined by one thing: the mobile phone. From 2014 to 2024, the country went from assembling less than 30% of the phones it consumed to 99%, thanks largely to the ₹1.9 trillion Production Linked Incentive (PLI) scheme. According to the ministry of electronics and information technology (MeitY), the value of India's electronics production rose nearly fivefold to ₹9.5 trillion in 2023-24, from ₹1.9 trillion in 2014-15. Yet, for all the triumph in scale, for India to emerge as a global manufacturing powerhouse, it has to go beyond smartphones and also break free from its role as an assembly shop. To make mobile phones, electronic manufacturing services (EMS—or contract manufacturers) companies depend on imports of key components, including cameras, displays, high-end battery packs, semiconductors, and printed circuit boards (PCBs). Even other electronic products—smart TVs, CCTV cameras, computers, wearables, and hearables—are assembled from imported components. If product assembly is about managing global supply chains and focuses on integration and system level performance, 'manufacturing of components involves deeper scientific and engineering complexity," says Vinod Sharma, chairman of the Confederation of Indian Industry (CII)'s National Committee on Electronics Manufacturing. PLI boost Components are the DNA of electronics. However, the components that go into electronic goods in India are still largely sourced from China, Korea, and Taiwan. 'Even now, 85–90% of the electronics component value is imported," says a MeitY report. In 2023, only $15 billion of India's $101 billion electronics output came from components, the report noted. 'Without component manufacturing, there is no ecosystem. You can't make a product unless you can source the heart of it locally. Otherwise, you're just screwing parts together," says Sanjiv Narayan, co-founder of Syrma SGS Technology, a three-decade-old electronics manufacturing company. The ₹3,700 crore company, which exports 30% of its production, has 13 factories manufacturing electronics, automotive, telecom, and industrial electronics products, among others. In an effort to incentivize component manufacturers and boost localization, the government launched a ₹22,919-crore Electronics Component Manufacturing Scheme (ECMS) in April. The last date for companies to apply for benefits under the scheme is 31 July. ECMS will run for six years, from 2025-26 to 2031-32. It offers incentives for the manufacture of various components, including camera modules, displays, and multi-layer PCBs. As CII's Sharma put it, 'Components of components need to be there. The components policy is trying to address this issue by giving incentives for creation of the local ecosystem." Indeed, in a release announcing the launch, MeitY stated: 'The scheme aims to develop a robust component ecosystem by attracting large investments (global/domestic) in the electronics component manufacturing ecosystem, increasing domestic value addition by developing capacity and capabilities, and integrating Indian companies with global value chains." ECMS envisages attracting investments to the tune of ₹59,350 crore, generating production worth ₹4.5 trillion and creating additional direct employment for 91,600, as well as many indirect jobs. It has already received 70 applications— 80% from small and mid-sized players. According to reports, large companies such as Tata Electronics, Foxconn and Dixon Technologies are among the applicants. Queries sent to MeitY are yet to elicit a response. The scheme could provide the missing piece for expansion beyond smartphones. If implemented effectively, it will help build domestic supply chains for crucial components—an essential step in reducing dependence on imports. While the new PLI scheme has a long list of components, India does not have expertise in all of these. Initially, it will go with electro-mechanical components such as relays, switches, fuses and capacitors, for which manufacturing is already happening locally. These are the low-hanging fruit that Indian manufacturers can go after immediately. There is local expertise in parts such as camera modules and the industry will have to bank on collaborations, or global manufacturers might set up base here to make these. Interestingly, back in the 1980s India had a thriving components hub, with up to 80% of the black & white TVs sold in the country manufactured with locally sourced components. But later, with technology shifts, limited scale and zero import duty on components, the ecosystem for electronic parts died an early death. Engineering complexity For all the ambition, manufacturing components is a complex business, vastly different from assembling electronic products such as smartphones. The latter is akin to putting together 400-500 components, including cameras, sensors, a battery, memory, integrated circuits, and other parts to make a fully functional device. While all of that may seem complicated, assembling a smartphone is like a walk in the park compared to making components. To put that in context, each of the 500 or so components in a smartphone has multiple components within them. 'A manufacturer of components is dealing with far more complexity than someone who is assembling those components," says Narayan. 'It is foundational engineering. Making components requires advanced materials science capabilities, highly specialized machinery, precision control at nanometer scales." For instance, making advanced batteries needs understanding of complex battery chemistry, rare materials and very precise manufacturing. 'Right now, India is building the research, deep tech ecosystem and infrastructure needed for this level of manufacturing. As these areas grow, we have a strong opportunity to reduce our reliance on other countries," says Varun Gupta, co-founder of Boult. The company designs, develops and manufactures wireless earbuds, headphones, smartwatches and speakers, among other electronic gear. Each component is a mini-system in itself. Take for instance, the multilayer ceramic chip capacitor (MLCC) energy storage device. Its size varies widely for different applications, ranging from ultra-miniature (0.25 x 0.125 mm) to large (5.7 x 5.0 mm). The ultra-miniature MLCC, which is used in space constrained applications such as smartphones, hearables, wearables, etc., is manufactured by stacking alternating layers of ceramic dielectric material (insulator) and metallic electrodes, then sintering and applying external terminations. This process involves creating 50-100 thin ceramic sheets, printing electrode patterns on them, stacking the sheets, and then firing the stack at high temperatures to create a solid, monolithic structure that ranges in size from a few grains of rice to about a fingernail. Again, companies making camera modules for smartphones will need local supplies of image sensors, lens, infrared filters, digital signal processors (to convert images into digital format, etc.) The global market for camera modules was $43.3 billion in 2023 and is expected to be $68.5 billion in 2028, according to Markets and Markets. South Korea's LGInnotek, and China's OFILM and Sunny Optical Technology are among the large global manufacturers of camera modules. The skills needed for assembly-line operations and manufacturing components are also different. A diploma holder or electronics/mechanical engineer will be ready for assembly operations after about 30 days of training. For component manufacturing, the same talent will have to be trained for up to six months to become familiar with additional manufacturing lines, industrial gases, contamination control, temperature, pressure and working in dust free, ultra-clean environments, among myriad things. Smartphone-centric assembly EMS in India has largely been mobile phone-centric," says CII's Sharma. 'It's like a 4x400 relay race—we've run the first lap, but the remaining three are even more critical." The first leg of India's relay was defined by contract manufacturing of smartphones. Companies such as Foxconn, Wistron, Dixon, and others became the backend for Apple, Xiaomi, OnePlus, RealMe and other brands, while Samsung also scaled up, setting up a large smartphone factory in Noida. PLI-led manufacturing—where the government gives sops between 4-6% on incremental sales—not only made the country self-reliant (largely in smartphones) but also helped scale up local makers such as Dixon Technologies, Optiemus Infracom, Syrma SGS Technology. It also attracted global companies, including iPhone makers Foxconn and Pegatron, and electronic components makers Jabil Circuit and others. But assembly is not manufacturing, and setting up a component ecosystem will help address that lacuna. 'Our value addition in electronics is only 10–15%," says Saurabh Agarwal, tax partner and manufacturing practice lead at EY India. 'It shows that because of PLI, India is among the largest assemblers of phones in the world. But a lot needs to be done to increase local value addition. A lot of critical components are being imported." Also, unlike in smartphones, in the non-mobile categories, which include televisions, air conditioners (ACs), washing machines, IT hardware, and industrial electronics, the volumes are way less compared to what China does and hence makers can't derive economies of scale. In smartphones, India has a better record with around 300 million units being made (read: assembled) and Apple also ramping up production here. However, India still heavily relies on imports for products such as laptops, desktops, other IT hardware and key parts of TVs and washing machines. 'IT hardware players didn't have to make in India to sell in India as import duties were nil to low. Laptop and desktop companies weren't in the same predicament as phone makers like Apple or Samsung," says CII's Sharma. Made in India? CII's Sharma sees design as the third lap of India's EMS relay—and the most ignored. 'You can't build a brand without design. And unless Indian companies invest in original product and component design, we'll never have a Samsung or a Panasonic," he says. This view is echoed by Gupta of Boult. The company reported revenue of ₹3 crore in 2017, its first year, and in 2024-25, clocked ₹750 crore. For manufacturing, it relies on imports of key parts such as chips, drivers, and LED screens. 'We've set up our own SMT (surface mount technology, which embeds chips on a printed circuit board) lines and source plastics and packaging domestically," says Gupta. 'But core manufacturing still depends on global suppliers," he adds. The final lap, CII's Sharma believes, is about building brands. And here, India has stumbled repeatedly. One of the reasons often cited by the industry is lack of volumes. Local brands cannot compete with cheaper imports and are forced out. Though, this is changing in some areas, like ACs. India now makes 22-25 million ACs a year, up from 9-10 million a decade back. China is still the global AC hub with 90 million units, India now has the volumes, which justifies making PCBs for AC inverter controllers, which are currently imported from China. One way to create economies of scale is to collaborate rather than compete. For example, Ashok Gupta, chairman of Optiemus Infracom, argues that India lacks a 'we' culture. 'Instead of collaborating, Indian brands tried to go solo. Without economies of scale, they couldn't survive. The government gave us the PLI cherry. But industry players didn't work together to build the cake," says Gupta. Optiemus has four factories in Noida and makes drones, wearables, hearables, and telecom gear, among other products. It now manufactures for brands such as Realme, Noise, and Boat. EY India's Agarwal points out that companies can scale up from assembly to brands once they have the know-how. For instance, when Intel set up its factory in Taiwan back in the 1980s, local company TSMC benefited and today it is the largest contract manufacturer of chips in the world. New opportunities India's next challenge lies in building a broader industrial base. Companies such as Syrma SGS, Boult and Optiemus are positioning themselves to tap new opportunities in telecom, automotive, and medical devices. Even Lenovo, a Chinese company, has expanded its Puducherry facility to accommodate server manufacturing—an indication that India's next manufacturing chapter is beginning to take shape. But experts warn against over-reliance on incentive schemes. 'Your business model must be viable on its own," Optiemus' Gupta says. 'We have passed the first baton," CII's Sharma says, referring to his relay analogy. 'If we fumble the next stages—building components, design, and brands—we'll never win the race."

New Indian Express

15 hours ago

• New Indian Express

PM has mastered ‘art of slogans', but offers no solutions, says Rahul Gandhi

NEW DELHI: Congress leader Rahul Gandhi on Saturday said Prime Minister Narendra Modi has mastered the 'art of slogans' but offers no solutions and claimed that India's manufacturing was at a record low despite the 'Make in India' initiative. ''Make in India promised a factory boom. So why is manufacturing at record lows, youth unemployment at record highs, and why have imports from China more than doubled? The PM has mastered the art of slogans, not solutions. Since 2014, manufacturing has fallen to 14 per cent of our economy,' he said in a post on X. Gandhi said Modi has 'no new ideas' and has 'surrendered'. 'Even the much-hyped PLI scheme is now being quietly rolled back,' he alleged. He said India needs a fundamental shift, one that empowers lakhs of producers through honest reforms and financial support. 'We must stop being a market for others. If we don't build here, we'll keep buying from those who do. The clock is ticking,' said the leader of opposition in Lok Sabha. The Congress leader met mobile repair technicians at Nehru Place in the capital and attached a video of the conversation to the post. 'I met Shivam and Saif, both bright, skilled and full of promise - yet denied the opportunity.' Noting that there is a difference between 'Made in India' and 'Assembled in India', he said: 'The truth is stark: we assemble, we import, but we don't build. China profits. China is the world's electronic market. There is no other electronic market anywhere. Assemble as many iPhones as you want, all you are doing is giving money to the big oligopolies of India. Start making iPhones, it's a completely different ball game,' he said. The former Congress chief said to manufacture parts, whether it is a motherboard or 'small pieces', you need a certain level of machining, a certain level of quality, a certain level of understanding of tolerances of working with small components. 'And, at the centre of it, and people don't like it when I say it, is the idea of caste. We need to make this transparent. We need to show exactly how Indian society distributes power,' he said.

Business Standard

a day ago

• Business Standard

Rahul Gandhi slams PM Modi over 'Make in India', cites job concerns

The Leader of Opposition in Lok Sabha and Congress MP Rahul Gandhi on Saturday criticized Prime Minister Narendra Modi saying that despite promises of a "Make in India" factory boom, manufacturing in the country is at a record low and youth unemployment is very high. Gandhi questioned the effectiveness of the "Make in India" initiative, highlighting that manufacturing in the country has fallen to a record low of 14 per cent of the economy since 2014. He also pointed to rising youth unemployment and a doubling of imports from China, accusing Prime Minister Narendra Modi of focusing on slogans rather than real solutions. In a post on X, Rahul Gandhi shared a video and wrote, "Make in India" promised a factory boom. So why is manufacturing at record lows, youth unemployment at record highs, and why have imports from China more than doubled? Modi ji has mastered the art of slogans, not solutions. Since 2014, manufacturing has fallen to 14% of our economy." He highlighted the challenges faced by India's youth, sharing in a post that he met two talented young men, Shivam and Saif, in Nehru Place, New Delhi, who remain unable to fulfil their potential. He criticised the country's current economic model and said, "In Nehru Place, New Delhi, I met Shivam and Saif - bright, skilled, full of promise - yet denied the opportunity to fulfil it. The truth is stark: we assemble, we import, but we don't build. China profits." He said that Prime Minister Modi has no new ideas and has given up on growing India's industries. He added that even the important PLI scheme is being quietly stopped. Gandhi called for big changes to help Indian producers with honest reforms and financial support, warning that if India doesn't build its industries, it will keep buying from other countries. "With no new ideas, Modi ji has surrendered. Even the much-hyped PLI scheme is now being quietly rolled back. India needs a fundamental shift - one that empowers lakhs of producers through honest reforms and financial support. We must stop being a market for others. If we don't build here, we'll keep buying from those who do. The clock is ticking," the post reads The Make in India initiative was launched by the Prime Minister in September 2014 as part of a wider set of nation-building initiatives.