IESA hails Budget, urges production incentives, GST cut for batteries, charing infra, electrolyzers

New Delhi, Feb 3 (PTI) India Energy Storage Alliance (IESA) on Monday called Budget 2025 a transformative vision for the energy sector and urged the government to provide production-linked incentives and GST cuts on batteries, charging infra, electrolyzers to boost renewables.

The industry alliance, with over 180 companies from the domestic battery, e-mobility, and hydrogen industries as its members, has thanked Finance Minister Nirmala Sitharaman for considering some of its pre-budget recommendations that it had represented to the ministry early last month, a statement said.

The IESA hailed the budgetary announcements as progressive and proactive measures towards making India a global hub for manufacturing and R&D in clean energy and technology sectors.

The body also submitted post-budget recommendations and highlighted challenges that the Indian industry faces in setting up large-scale manufacturing.

It suggested that a dedicated incentive programme like ACC (advance chemistry cell) PLI (production linked incentive scheme) for ACC components (i.e., ACC active materials’) manufacturers is required to strengthen the domestic supply chain in India.

Vinayak Walimbe- President (Interim), of IESA and Managing Director, Customized Energy Solutions Pvt Ltd India said, "National Manufacturing Mission, Export Promotion Mission, and duty exemptions on essential raw materials will accelerate India's position as a global hub for energy storage solutions." IESA has been working for more than 10 years towards the growth of these sectors and it’s encouraging to see our recommendations are considered positively towards sector growth, he stated.

The strengthening of the National Manufacturing Mission would encourage domestic manufacturing and make India a more attractive location for battery production, he opined.

And, BCD exemption on raw materials will drive India's transition towards clean energy, he also noted.

The expanded Production-Linked Incentive (PLI) schemes and tariff adjustments for critical minerals are also expected to strengthen the entire renewable energy ecosystem significantly, he stated.

IESA called for a reduction in GST on batteries from 18 per cent to 5 per cent to reduce the burden on the OEMs and energy service providers.

Providing a battery as a service at 18 per cent GST would increase the operational cost of the end-customers as well, it stated.

Vikram Handa, Managing Director, Epsilon Advanced Materials, Chair, India Battery Manufacturing & Supply Chain Council (IBMSCC), IESA stated, "The budget's overall thrust towards fostering a robust cleantech ecosystem is highly commendable and positions India for leadership in the global clean energy transition." According to the current GST regime, the tax rates on lithium-ion batteries are 18 per cent.

After introducing such transformative incentives and initiatives, if the government can consider a reduction in the GST rate and bring a uniform rate at the rate of 5 per cent GST, this can be a game-changer in facilitating the expansion of large-scale energy storage deployment across the country, it stated.

Rajat Verma, Founder &CEO, Lohum, Chair, India Reuse & Recycling Council (IRRC), IESA stated, "The government's strategic vision for domestic manufacturing and critical minerals recycling demonstrates remarkable foresight in securing our sustainable future." Manoj Upadhyay, Chairman of ACME Group and member IESA emphasised, "The significant focus on renewable energy (in the budget), including increased funding for solar and wind projects and the continued push for green hydrogen, will pave the way for a sustainable and self-reliant energy ecosystem." IESA has also recommended reducing the GST on electrolyzers from 18 per cent to 5 per cent to support upcoming pilot green hydrogen production projects in India.

This reduction will lower initial costs, encourage adoption, and foster growth in the sector, it pointed out.

The GST rate can be gradually increased to 12 per cent once domestic manufacturing of electrolyzers and balance of system technologies achieves critical mass and becomes globally competitive, it suggested. PTI KKS KKS MR MR