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Informist, Thursday, Sep 5, 2024

 

--Gadkari: E-vehicles industry should focus on quality, cost-efficiency 
--Gadkari: Export market good for e-vehicles industry 
--Gadkari: E-vehicles sector doesn't need govt policy support any more 
--Gadkari: E-vehicles sector got advantage of growing demand, low GST 
--Gadkari: Electric vehicles industry no longer needs subsidy 
--Gadkari: India to be top lithium-ion battery exporter in 5 yrs 
--Gadkari: India has tremendous potential for solar power 
--Gadkari: Planning inter-city electric buses to lower pollution 
--Gadkari: Need to develop public transport to achieve net-zero target 
--Gadkari: Re-routing agri ops to power sector to increase employment 
--Gadkari: Re-routing agri ops to power sector to raise bio-fuels use 
--Gadkari: Working on plans to diversify farm ops to power sector 
--CONTEXT: Minister Gadkari at BloombergNEF's BNEF Summit 
--Gadkari: Need to find solution to India's huge fossil fuel imports 
 

NEW DELHI – The electric vehicle industry is in good shape with rising domestic as well as global demand, and does not require further support from the government, either through subsidies or through policy, Minister of Road, Transport and Highways Nitin Gadkari said today. 

"In my opinion, manufacturing of electric vehicles no longer needs to be subsidised by the government," Gadkari said at the BloombergNEF Summit here, adding that consumers were looking to buy more electric and compressed natural gas vehicles themselves.

 

The electric vehicle industry enjoys the benefit of low goods and services tax as well, he said. GST on diesel- or petrol-run vehicles is 28% and on top of that, there are cesses. On the other hand, GST on electric vehicles is just 5%, Gadkari said, adding that this by default gave customers an easy choice of choosing a product with lower taxation.

 

Over the last few years, the government has been incentivising the electric vehicles sector through many policies and schemes, including the FAME, or Faster Adoption and Manufacturing of (Hybrid and) Electric vehicles scheme. Currently, this is India's flagship scheme for promoting electric mobility. The second leg of the scheme – FAME-II – ended in March last year. 

 

The government is expected to finalise the third leg of the FAME scheme in a month or two, according to Minister of Heavy Industries H.D. Kumaraswamy. "Several suggestions are coming for FAME-III. Even the Prime Minister's Office has given some suggestions," Kumaraswamy said at ASSOCHAM's National Conference on Electric Mobility on Wednesday.  

 

 

With these benefits, the electric vehicle industry should focus on quality and cost-efficiency, the minister said. "The domestic market is good, but the international market also has a huge scope for India to become a lead exporter (of electric vehicles)," he said.

 

Speaking further about taxation, Gadkari clarified that he wasn't pitching for higher taxes on petrol or diesel-based vehicles but for lower taxes on ecologically better options like flexible fuel vehicles. On Monday, he had urged all state finance ministers to take up the issue of reducing GST on flexible fuel-based vehicles to 12% in the council meetings. Currently, flexible fuel vehicles attract a GST rate of 28% plus 15?ss. The GST Council will meet next on Monday.

 

Flex fuel, or flexible fuel, is an alternative fuel made from a combination of petrol or diesel and methanol or ethanol. Flex fuel vehicles are those that have internal combustion engines designed to run on more than one type of fuel.

 

On leveraging export opportunities, Gadkari said India would be a top lithium-ion battery exporter in the next five years. In Apr-Jun, India exported lithium-ion batteries worth $22.62 mln, lower than the $25.34 mln exported in the same period last year, latest data by the commerce ministry shows.

 

Currently, lithium-ion batteries have become standard for virtually all modern electronics, as well as electric vehicles.

 

Speaking on the need to implement practices to bring down the carbon footprint, Gadkari said the government was planning intercity electric buses to lower pollution. The Delhi-Jaipur, Delhi-Chandigarh, and Delhi-Dehradun routes were options on which electric buses could be introduced, he said.

 

Developing a more robust public transport system was the key to achieving the net-zero target, he said. India has set an ambitious goal of achieving net-zero carbon emissions by 2070. 

 

"I am conscious of the fact that 40% of air pollution is owing to transportation," the minister said, affirming that the ministry was committed to lowering emissions progressively.

 

Gadkari reiterated that it was imperative for the government to find a solution to India's huge fossil fuel imports. The Indian economy, which has a huge fuel consumption, depends heavily on imports of fossil fuels. The government will re-route agriculture operations to the power sector to raise biofuels, he said.

Gadkari stressed that the government planned to diversify agricultural output into the power sector. Ethanol blending is a move in that direction.

Ethanol is an agricultural by-product that is mainly obtained from processing sugar from sugarcane, but also from other sources such as rice husk or maize. To reduce dependence on crude oil, the government has set a target of achieving 15% blending of ethanol with petrol in 2023-24, 18% in the subsequent year, and 20% in 2025-26. 

 

As of Aug 1, India achieved a cumulative blending of 13.3% in ethanol supply year 2023-24 (Nov-Oct), according to the Petroleum Planning & Analysis Cell.

 

Besides these policy pushes for green energy, Gadkari also said India had tremendous potential for solar energy. The government has been pushing for more and more projects in the solar energy sector, including the new PM-Suryaghar Muft Bijli Yojana, which offers 300 units of free electricity to 10 mln households every month.  End

 

US$1 = 83.98 rupees

 

Reported by Priyasmita Dutta and Afra Abubacker

Edited by Avishek Dutta

 

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