A unit of billionaire Mukesh Ambani-led Reliance Industries Ltd. risks being penalised after failing to set up a battery cell plant that formed part of Indian Prime Minister Narendra Modi\u2019s push to cut import dependence, according to people familiar with the matter.\u00a0<\/small><\/p>\n\n\n\n
Reliance New Energy Ltd., among companies that won a bid for battery cell manufacturing in 2022 under an Indian government plan to reward local production, is liable to pay fines of as much as Rs 125 crore ($14.3 million) for missing a deadline, said the people who asked not to be identified because the deliberations are private.<\/p>\n\n\n\n
Rajesh Exports Ltd., which also applied under this government initiative to make battery cells, is also on the hook for stalling the advanced-chemistry cell program and could be levied similar sized penalties, they said. <\/small><\/p>\n\n\n\n
The small monetary fines are a mere rap on the knuckle, especially for Asia\u2019s richest person and his Reliance conglomerate. But the failure to reach state-directed manufacturing goals reflects the technological challenges and shifting market dynamics that can stymie Modi\u2019s \u2018Make in India\u2019 vision to rival China as the world\u2019s factory. <\/small><\/p>\n\n\n\n
Modi has sought to boost manufacturing to 25 per cent of gross domestic product but the share has slipped to 13 per cent in 2023 from 15 per cent in 2014.<\/p>\n\n\n\n
Representatives for Reliance Industries, Rajesh Exports and India\u2019s Heavy Industries Ministry, which overseas this initiative, didn\u2019t respond to emails seeking comments. <\/small><\/p>\n\n\n\n
Patchy Success<\/strong> <\/small><\/p>\n\n\n\n While subsidies to manufacturers under the so-called Production-Linked Incentives, or PLI, have worked well to boost local assembly of smartphones, the success hasn\u2019t been uniform across sectors. <\/small><\/p>\n\n\n\n Reliance New Energy, Rajesh Exports and the unit of Ola Electric Mobility Ltd. had won bids in 2022 to build the battery cell plants \u2014 part of the country\u2019s push to reduce dependence on imports for electric vehicles \u2014 under the PLI program. <\/small><\/p>\n\n\n\n Manufacturers were eligible for Rs 18,100 crore worth of subsidies on meeting milestones for the project that sought to create a cumulative 30 gigawatt-hour capacity of advanced chemistry cell battery storage.<\/p>\n\n\n\n The firms were required to achieve a minimum \u2018committed capacity,\u2019 along with local value addition of 25 per cent within two years of the agreement, and 50 per cent within five years, the people said. <\/small><\/p>\n\n\n\n The third player in the mix, however, billionaire Bhavish Aggarwal\u2019s Ola Cell Technologies Pvt. has made progress on its commitments under this PLI program. <\/small><\/p>\n\n\n\n The Ola unit started trial production in March last year and plans to start commercial production of lithium-ion cells in the April to June quarter, a spokesperson for Ola Electric said in an emailed response. \u201cWe are well on track to meet the set timelines,\u201d he said.<\/p>\n\n\n\n \u2018Risky to Invest\u2019<\/strong> <\/small><\/p>\n\n\n\n The Reliance unit, meanwhile, has turned its focus to green hydrogen, a fuel seen as key to a carbon-free future, as part of a shift in the company\u2019s priorities, the people said. The companies are also yet to firm up the technology needed to manufacture lithium-ion cells locally. <\/small><\/p>\n\n\n\n \u201cIt was quite risky to invest in cell manufacturing last year – too much uncertainty with a lot of global overcapacity and uncertain trade environment,\u201d Jiayan Shi, a BloombergNEF analyst, said. <\/small><\/p>\n\n\n\n Also, the capital investment needed for building lithium-ion battery plants is very high, ranging from $60 to $80 million per gigawatt-hour, she added. <\/p>\n\n\n\n Moreover, global lithium-ion phosphate, or LFP, battery prices have been on the decline. This has made imports of cells cheaper than ever, creating uncertainty around domestic demand and slowing the pace of investments in India. <\/small><\/p>\n\n\n\n Although Reliance New Energy did acquire sodium-ion cell maker Faradion in 2021 and Netherlands-based Lithium Werks, including its manufacturing facilities in China, in 2022, they represented small investments.<\/p>\n\n\n\n Eqwires Research Analyst<\/a><\/strong><\/p>\n\n\n\n Top-notch SEBI registered research analyst<\/a><\/strong><\/p>\n\n\n\n Best SEBI registered Intraday tips provider <\/a><\/strong><\/p>\n\n\n\n info@eqwires.com<\/strong><\/a><\/p>\n\n\n\n Telegram <\/a>| Facebook <\/a>| Instagram<\/a><\/strong><\/p>\n\n\n\n Call: +91 9624421555 \/ +91 9624461555<\/em><\/strong><\/p>\n\n\n\n www.eqwires.com<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" A unit of billionaire Mukesh Ambani-led Reliance Industries Ltd. risks being penalised after failing to set up a battery cell plant that formed part of Indian Prime Minister Narendra Modi\u2019s push to cut import dependence, according to people familiar with the matter.\u00a0 Reliance New Energy Ltd., among companies that won a bid for battery cell manufacturing in 2022 under an Indian government plan to reward local production, is liable to pay fines of as much … Continue reading “Reliance New Energy risks being fined up to Rs 125 cr in rebuke for Ambani”<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":3767,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[74],"tags":[],"class_list":["post-3766","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-best-sebi-registered-advisory-company"],"_links":{"self":[{"href":"https:\/\/www.eqwires.com\/tutorials\/wp-json\/wp\/v2\/posts\/3766","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.eqwires.com\/tutorials\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.eqwires.com\/tutorials\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.eqwires.com\/tutorials\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.eqwires.com\/tutorials\/wp-json\/wp\/v2\/comments?post=3766"}],"version-history":[{"count":1,"href":"https:\/\/www.eqwires.com\/tutorials\/wp-json\/wp\/v2\/posts\/3766\/revisions"}],"predecessor-version":[{"id":3768,"href":"https:\/\/www.eqwires.com\/tutorials\/wp-json\/wp\/v2\/posts\/3766\/revisions\/3768"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.eqwires.com\/tutorials\/wp-json\/wp\/v2\/media\/3767"}],"wp:attachment":[{"href":"https:\/\/www.eqwires.com\/tutorials\/wp-json\/wp\/v2\/media?parent=3766"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.eqwires.com\/tutorials\/wp-json\/wp\/v2\/categories?post=3766"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.eqwires.com\/tutorials\/wp-json\/wp\/v2\/tags?post=3766"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}