Reliance New Energy, a subsidiary of Reliance Industries, is reportedly at risk of facing penalties for failing to set up a battery cell manufacturing plant within the stipulated timeframe under India’s initiative to reduce import dependence. According to sources cited by Bloomberg, the company could be fined up to ₹125 crore ($14.3 million) for missing the deadline.
Rajesh Exports, another company selected under the same government initiative, is also under scrutiny for delays in its advanced-chemistry cell manufacturing project and could face similar financial penalties.
The delays in meeting manufacturing targets highlight the technological and operational challenges that could impact India’s ambition to strengthen its domestic manufacturing sector. Prime Minister Narendra Modi’s ‘Make in India’ initiative aims to increase the manufacturing sector’s contribution to 25% of GDP, but this share has declined to 13% in 2023 from 15% in 2014.
In 2022, Reliance New Energy, Rajesh Exports, and a unit of Ola Electric Mobility Ltd were awarded contracts under the Production-Linked Incentive (PLI) scheme to establish battery cell manufacturing facilities. The initiative, which provides ₹18,100 crore in subsidies, was designed to create a total of 30 gigawatt-hours of advanced battery storage capacity.
While Reliance New Energy and Rajesh Exports have yet to meet their targets, Ola Electric has made significant progress, starting trial production in March 2023 and planning to begin commercial production between April and June 2024. A company spokesperson confirmed to Bloomberg that Ola Electric is on track to meet the project timelines.
Despite Bloomberg’s efforts to seek comments from Reliance Industries, Rajesh Exports, and the Ministry of Heavy Industries, which oversees the initiative, no responses were received. The delays underline the challenges India faces in reducing its reliance on imports and positioning itself as a major player in global battery manufacturing.
