5 industrial corridors being promoted as EV, battery manufacturing hubs in Rajasthan
As announced in the state EV policy, the government of Rajasthan in January 2023 affirmed that it will work on developing five industrial corridors as Electric Vehicle (EV) and batteries manufacturing sectors along with incentives to promote use of EVs. The state EV policy mentions that the government envisages to enable an environment for manufacturing of EVs and batteries.
The five industrial regions shortlisted for the development include:
- Ajmer-Kishangarh industrial area,
- Rajsamand-Bhilwara industrial area,
- Jaipur-Dausa industrial area,
- Khushkheda-Bhiwadi-Neemrana investment region, and
- Jodhpur-Pali-Marwar industrial region
As per the Rajasthan EV Policy 2022, “in terms of manufacturing, battery localisation is very low in the country. This low localisation has created a dependence on the battery imports, mostly for the lithium-ions batteries, since India does not have natural reserves of lithium. Another reason for low localisation of battery manufacturing is that battery research and development is highly capital intensive. However, developing an EV manufacturing, supply chain and infrastructure ecosystem will help in reducing cost associated with purchasing EVs, which will help drive EV adoption.”
Rajasthan Investment Promotion Scheme (RIPS) 2019 identifies Electric Vehicle manufacturing as a thrust sector and additionally lay emphasis on how to improve ease of doing business in the state and promote single window clearance across various sectors. The state Government envisions to bring about Industry 4.0 revolution by promoting Electric Vehicle manufacturing in Rajasthan.
Key incentives to be offered under the RIPS-2019 which will be extended to EV manufacturing enterprises in Rajasthan are as mentioned below.
Key incentives to be offered under the RIPS-2019 for EV manufacturing
|a.||Investment Subsidy of 75% of State tax due and deposited, for seven years|
|b.||Employment Generation Subsidy in the form of reimbursement of 50% of employer’s contribution towards employees EPF and ESI, for seven years|
|c.||Exemption from payment of 100% of Electricity Duty for seven years|
|d.||Exemption from payment of 100% of Land Tax for seven years|
|e.||Exemption from payment of 100% of Market Fee (Mandi Fee) for seven years|
Exemption from payment of 100% of Stamp Duty
|g.||Exemption from payment of 100% of conversion charges payable for change of land use and conversion of land|
As EV manufacturing is one of the ‘Thrust’ sectors under RIPS 2019, additional benefits applicable for making an investment equal to or above INR 25 Cr. are:
- 5% Interest Subsidy on term loan taken by the enterprise from Financial Institutions or State Financial Institutions or Banks recognized by Reserve Bank of India, for making an investment in plant & machinery on the plant and machinery for a period of five years subject to a maximum of INR 1 Cr. per year.
- Capital Subsidy equivalent to 25% of investment made on the plant & machinery, subject to a maximum of INR 50 lakh.
In last few months there have been some significant announcements by EV OEMs setting up plants in Rajasthan. A few of the notable ones are as mentioned below.
- In September 2022, two-wheeler maker Hero Electric announced that it will set up a mega EV manufacturing plant with an investment of INR 1200 crore in Rajasthan. The proposed unit will be located in Salarpur industrial region in the Alwar district. The production is expected to start by the end of 2023.
- In September 2022, Saera Electric Auto Private Limited (SEAPL) inaugurated a new manufacturing plant in Bhiwadi, Rajasthan, to manufacture electric two-wheeler (E2W) frames and chassis. The company states that it will be investing around INR 25 crore in phases for setting up the new manufacturing unit.
- In June 2022, E2W maker Okinawa Autotech, announced that it will invest INR 500 crore to set up a new manufacturing plant at Karoli in Rajasthan. Spread across 30 acres of land, the factory will have an annual production capacity of 10 lakh units and will be fully operational from October 2023.
Clearly the pace of investments is growing substantially in Rajasthan in last few months and government is also ensuring via these EV corridors to build complete EV ecosystem in this region.