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Investment in manufacturing of EVs, batteries and high technology automotive components in India

 The Ministry of Heavy Industries (MHI) has been continuously working towards making the auto sector in India ‘Aatmanirbhar’ by augmenting ’Make in India’ efforts of the Government and to position India as an alternative manufacturing hub for automobiles and its components. The key initiatives of Ministry of Heavy Industries during the year are as under:

  1. Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME India II) Scheme has been launched with an outlay of Rs 10,000 crore to incentivize demand for Electric Vehicles (EVs) by providing upfront subsidies and creating EV charging infrastructure. 1 million Electric 2 Wheelers, 5 lakh Electric 3 Wheelers, 55,000 Electric Cars and 7,090 Electric Buses are to be supported under FAME II through subsidies. Allocation of Rs 1000 crore has also been made under FAME II for provision of EV charging stations.
  • FAME India II Scheme was redesigned in June 2021 based on experience particularly during Covid-19 pandemic and feedback from industry and users. The redesigned scheme aims at faster proliferation of Electric Vehicles by lowering the upfront costs. Following amendments have been made in the scheme:
  • Demand incentive for Electric 2 Wheelers has been increased from Rs 10,000/KWh to Rs 15,000/KWh with maximum cap increased from 20% to 40% of the cost of vehicles. 
  • For Electric 3 Wheelers, aggregation will be the key method to bring the upfront cost at an affordable level and at par with ICE-3 Wheelers. Energy Efficiency Services Limited (EESL) will aggregate demand for 3 lakh Electric 3 Wheelers for multiple user segments.
  • For Electric Buses, 9 cities with over 4 million population (Mumbai, Delhi, Bangalore, Hyderabad, Ahmedabad, Chennai, Kolkata, Surat and Pune) will be targeted. EESL will aggregate the demand in these 9 cities for remaining Electric Buses under the scheme on OPEX basis.
  • Further the scheme has been extended for further period of 2 years i.e. upto March 31, 2024 

After remodeling of FAME II in June 2021 sale of electric two wheelers has increased to over 5000 per week from 700 per week before remodeling.

Achievements under FAME India II scheme in this year

    • In calendar year 2021, total 1.4 lakh Electric vehicles (1.19 Lakh electric two wheelers, 20.42 K electric three wheelers and 580 electric four wheelers) have been incentivized upto 16 December 2021 amounting to incentive of about Rs 500 Crore under Phase-11 of FAME. Total 1.85 lakh Electric Vehicles have been incentivized under FAME II till now.
    • 835 Electric buses have been deployed (314 in Mumbai, 150 in Navi Mumbai, 90 in Ahmadabad, 105 in UP, 30 in Goa, 25 in Patna, 49 in Surat, 16 in Rajkot, 25 in Delhi, 11 in Chandigarh, 10 in silvassa and 10 in Dehradun), in this year till 16 December 2021. Total 861 Electric buses have been deployed under FAME II.
    • 50 Electric Buses have been sanctioned to GSRTC for deployment in Kewadia a place of national importance.
    • City/State Transport undertakings have issued supply order for 1040 Electric buses in this year till 16 December 2021 (100 in Goa, 100 for intercity bus operation by MS RTC, 40 in the city of Chandigarh, 300 in Delhi by DTC, 300 in Bangalore, 50 for intracity and 50 for intercity bus operation in the city of Tirupati, 100 for intercity bus operation by GSRTC). Total supply orders have been issued for 3428 Electric Buses under FAME
    • Timeline extension has been granted to STUs/CTUs undertakings as per their request to issue Supply Order/Letter of award by STUs/CTUs for 1040 electric buses in this year (100 in Goa, 100 for intercity bus operation by MSRTC, 40 in the city of Chandigarh, 300 in Bangalore, 50 for intra-city and 50 for intercity bus operation in the city of Tirupati, 100 in Rajkot, 150 in Surat, 50 each to KSRTC & NWKSRTC, 50 to Navi Mumbai).
    • 1576 EV charging stations have been sanctioned and Letters of Award have been issued across 9 Expressways and 16 Highways in this year till 1 6 Dec 2021.
    • Letters of Award (LOA) issued for 35 Charging stations have been issued till 1 6 Dec 2021 (25 in the city of Coimbatore and 10 in Erode). Total LOA have been issued for 1797 Charging stations in cities under FAME II.
    • Total 104 EV charging stations have been commissioned in this year till 1 6 December 2021 [91 under FAME I (9 on Delhi - Chandigarh, 3 on Mumbai-Pune Expressways, 12 in Bangalore, 4 in Ranchi, 10 in Goa, 45 in Hyderabad, 6 in Agra and 2 in Shimla) and 13 under FAME —II (4 in the city of Chennai, 3 in Delhi 4 in Nagpur and 2 in Ahmedabad)]
  1. Union Cabinet on May 12, 2021 approved the National Programme on Advanced Chemistry Cell (ACC) with an outlay of Rs 18,100 crore to incentivize setting up of manufacturing facilities in the country for 50 Giga Watt Hour of ACC and 5 GWh of "Niche” ACC. As of now ACC are imported in the country. The scheme was notified on June 9, 2021
  • Through this Scheme, the Government intends to optimally incentivize potential investors, both domestic and overseas, to set- up Giga-scale ACC manufacturing facilities with emphasis on maximum value addition and quality output and achieving pre-committed capacity level within a pre-defined time-period.
  • Total investment of Rs 45,000 crore is envisaged under this scheme. The scheme will reduce the import bills of ACC by Rs 1,50,000 crore.
  • Request for Proposal (RFP) has been issued on October 22, 202 I for inviting proposals from domestic and international manufactures for setting up manufacturing facilities for ACC Battery Storage in India. Pre-Proposal Conference was held on Nov 12, 2021 which was attended by over 100 participants representing over 20 domestic and international manufactures.
  1. Union Cabinet on Sep’ 15, 2021 approved the Productivity Linked Incentive (PLI) scheme for Automobile and Auto Components with an outlay of Rs 25,938 crore to incentivize manufacturing of Advanced Automotive Technology products and attract investments in the Automotive Manufacturing value chain. Its prime objectives include overcoming cost disabilities, creating economies of scale and building a robust supply chain in areas of Advanced Automotive Technology products.
  • It is estimated that over a period of five years, the PLI Scheme for Automobile and Auto Components Industry will attract fresh investment of over 142,500 crore, incremental production of over 12.3 lakh crore and will create additional employment opportunities of over 7.5 lakh jobs.
  • This scheme will facilitate the Automobile Industry to move up the value chain into higher value added products and increase India’s share in global automotive trade.
  • The PLI Scheme is open to existing automotive companies as well as new investors who are currently not in automobile or auto component manufacturing business.
  • The scheme has two components viz Champion OEM Incentive Scheme and Component Champion Incentive Scheme. The Champion OEM Incentive scheme is a ‘sales value linked’ scheme, applicable on Battery Electric Vehicles and Hydrogen Fuel Cell Vehicles of all segments and any other advanced automotive technology as specified by Ministry of Heavy Industries. The Component Champion Incentive scheme is a ‘sales value linked’ scheme, applicable on Advanced Automotive Technology components of vehicles, Completely Knocked Down (CKD)/ Semi Knocked Down (SKD) kits, Vehicle aggregates of 2-Wheelers, 3-Wheelers, passenger vehicles, commercial vehicles and tractors etc. Incentives are applicable both on domestic sales as well as on exports of the eligible products.
  • The scheme provides incentive of 13- 18% on Electric Vehicles, Hydrogen Fuel Cell Vehicles and their components and incentive of 8-13% on Advanced Automotive Technology products related to safety, emission control, shared, convenience, efficiency etc. The incentives will be available for five-year period from FY 2022-23 to FY 2026-27.
  • The PLI scheme for Automobile and Auto components and the Guidelines have been notified on Sep 23, 2021. Application Form for PLI Scheme, List of Advanced Automotive Technology Products and Window for Notice Inviting Applications has been notified on Nov 9, 2021. Window for Notice Inviting Applications is open for 60 days from Nov 11, 2021 to Jan 9, 2022.
  1. Ministry of Heavy Industries organized Round Table on December 4, 2021 in Goa under chairmanship of Dr Mahendra Nath Pandey, Minister for Heavy Industries with all stake holders from Central Government, State Governments & UTs, leaders of Auto OEMs & Automotive Component Manufacturers, Start Ups and Technical Experts to work out strategies to promote adoption of Electric Vehicles in India and attract investment in manufacturing of EVs, batteries and high technology automotive components in India.

Other Initiatives

A 11 .3 km long, Asia’s longest high-speed track (HST) was inaugurated at NATRAX, Indore, Madhya Pradesh by Hon’ble Minister (HI&PE) on June 29, 2021. This will be a one stop solution for all sorts of high speed performance tests for automobiles within the country. Availability of NATRAX HST will encourage indigenous development of wide variety of automobiles.

  1. NATRIP is one of the most significant initiatives of the Govt of India for the growth of Automobile sector in India and includes setting up of "State of the Art" automotive Homogenization, Testing, Certification and R&D infrastructure at three new centers at GARC, Chennai, NATRAX Indore, NIAIMT Silchar and upgradation of three existing centers at ARAI Pune, VRDE Ahmadnagar and ICAT Manesar (Gurugram). This project has been completed on Mar’3l 2021 and subsequently taken over by National Automotive Board (NAB).

In compliance of directives of Cabinet Secretariat for digitization of official records, the work of digitization of more than 15 Lakh pages (accumulated since inception of the project) were completed in Nov 2021 for NAB (NATRIP)/HQ. This is a major work accomplished by NAB (NATRIP) organization in time bound manner.

  1. Issue of GST Concession Certificate to orthopedic disabled persons is one of the important services provided by MHI under its Citizen's Charter. As a step towards Digital India, an online portal for issuing Aadhar Authenticated GST concession certificate was launched by MHI in Nov 2020. The development of online portal has improved the quality of service rendered by this Ministry. This IT enabled initiative has helped streamlining the process and facilitated issue of 1942 GST Concession Certificate in 10 months period from Jan'21 to Dec'21 (highest ever in the last five year period). This portal has helped the beneficiaries to avail benefits even during Covid- 19 pandemic scenario in 2021.
  1. In order to address the skill gaps and infrastructure development and technology needs for the Capital Goods Sector, Phase I of the Capital Goods scheme was rolled out by the Department in 2014. Phase I of the scheme fostered partnerships between Academia and Industry for engendering technology development with Government support.
    • The outcomes of the Scheme have proved the efficacy of the strategies deployed for technology and industrial infrastructure development.
    • Fifteen Common Engineering Facility Centres(CEFCs) including four Industry 4.0 SAMARTH centres and 6 Technology Innovation Platforms, Eight Centres of Excellence (COEs) for Technology Development, A 500 acres world class Machine Tool Park in Tuiuakuru, Karnataka in partnership with the Government of Karnataka has been established under the scheme. 25 new technologies in the field of machine tools, textile machinery, earth moving machinery, nano and sensor technologies, are being developed at national research institutes of eminence such as IITs, IISc, CMTI, etc. and some of these technologies are undergoing commercialization.
    • 74 workshops, webinars, awareness sessions etc have been organized under the theme Azadi Ka Amrit Mahotsav by SAMARTH Centers, Technology Innovation Platforms, CoEs, and Capital Goods Industry Association in this year.
  1. Development of web based open manufacturing technology innovation platforms: The Ministry of Heavy Industries has developed web based open manufacturing technology innovation platforms under the ongoing Capital Goods Scheme. These platforms wilt help in bringing all India’s technical resources and the concerned Industry on to one platform to kick start and facilitate identification of technology problems faced by Indian Industry and crowd source solutions for the same in a systematic manner so as to facilitate start-ups and angel funding of India innovations. This includes the development of the key ‘mother’ manufacturing technologies' indigenously through ‘Grand Challenges’ on the Platforms to help achieve the vision of an Aatmanirbhar Bharat and a globally competitive manufacturing sector in India. Hon'ble Minister of Heavy I ndustr les inaugurated the Technology Innovation Platforms on July 2, 2021 (through virtual mode). Details are as below:
    • Six Technology Platforms have been developed by IIT Madras, Central Manufacturing Technology Institute (CMTI), International Centre for Automotive Technology (ICAT), Automotive Research Association of India(ARAI), BHEL and HMT in association with IISc Bangalore. These platforms will focus on development of technologies for the globally competitive manufacturing in India. These platforms will facilitate industry (including OEMs, Tier 1 Tier 2 & Tier companies & Raw Material Manufacturers), start-ups, domain experts/professionals, R&D institutions and academia (colleges & universities), to provide technology solutions, suggestions, expert opinions etc. on issues involving manufacturing technologies. Further, it will facilitate exchange of knowledge with respect to research & development and other technological aspects.
    • Online registration on the Technology Platforms can be done at following url: https://aspire.icat.in, htrps:// Over 60,000 Students, Experts, Institutes, Industries and labs have already registered on these platforms.
  1. MHI is in the process of launching the Phase 2 of the ‘Enhancement of Competitiveness in the Indian Capital Goods Sector’ which will further lead to indigenization of products and technology. The Scheme proposal with total financial outlay of Rs. 1207 cr including Government Budgetary support of Rs. 975 crore is under approval.