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Time of India
13-05-2025
- Automotive
- Time of India
How can India safeguard its battery industry from the fallout of a global trade war?
Amid the global stock market and policy turmoil caused by Trump's rollout - and subsequent 90-day pause of reciprocal tariffs - the initial consensus was that its impact on India will be relatively muted. Chinese goods will incur a tariff rate of up to 145per cent , whereas goods from India and other countries will now attract a flat 10per cent rate. The automobiles and auto parts sector are exempt from reciprocal tariffs, but will have a separate 25per cent tariff rate. However, with China recently placing restrictions on exports of rare earths and key technologies, it could have a potential impact on India's battery ecosystem. Given the implications of these tariffs in reshaping global supply chains, India's electric vehicle (EV) and battery industry needs to respond quickly, both to remain competitive and capitalize on these emerging shifts. With the US market becoming increasingly difficult to access for foreign companies, and the Trump administration's priorities shifting away from clean transport, Asian battery giants are likely to pivot towards the rest of the world - including India, given the overcapacity across the battery supply chain. Given that global cell companies are increasingly building manufacturing facilities in Southeast Asia, there is likely to be healthy competition between Indian and SEA cell manufacturers since India has an existing Comprehensive Economic Cooperation Agreement (CECA) with the ASEAN region. Companies in South Korea also benefit from the Comprehensive Economic Partnership Agreement (CEPA) signed between both countries. Both of these agreements ensure zero duty lithium-ion cell imports into India. With India's battery manufacturing industry still at a nascent stage, it is crucial for the government and private sector to collaborate and ensure that the industry continues to grow, and supports new jobs, exports and domestic value creation. Learn from high-profile Global North failures by forming JVs with Asian battery giants. There have been high-profile failures recently in the battery cell industry, such as Northvolt in Europe and Britishvolt in the UK, which filed for bankruptcy protection in 2024 and 2023 respectively. Northvolt had raised US $15 billion and had supply agreements with major OEMs, such as Volkswagen and BMW, but was still unable to scale up production. These failures highlight the technological and economic complexity faced by companies other than some of those in China, South Korea and Japan in manufacturing cost-efficient and reliable battery cells. The main takeaways from the Northvolt debacle was its lack of focus towards core business segments and aggressive geographical expansion plans without building the right foundation, leading to overstretched resources, labor shortages and operational inefficiencies. A study from Volta Foundation found that the fastest and most reliable way to set up and scale battery cell manufacturing is through joint-venture partnerships with leading global companies. Given the recent thaw in India-China relations, New Delhi should encourage partnerships between domestic companies and Asian battery companies that can support skills and technology transfer, as well as line automation and a qualified, competitive and reliable supply chain. These JVs should be ideally majority owned by the domestic company to ensure technology transfer and the development of local know how. The EU has been mulling over new guidelines requiring international companies to transfer intellectual property and technology in return for accessing subsidies to set up battery plants on the continent. Targeted public support can play a key role The Indian government has implemented several policies that helped kick start battery cell manufacturing in India. The Cabinet approved the production-linked incentive scheme for advanced chemistry cell batteries (PLI-ACC) in May 2021, allocating ₹18,100 crore to create a manufacturing capacity of 50 GWh. However, progress has been mixed, with a recent media report claiming that only ₹24 crores has been disbursed so far to PLI ACC winners, less than 1per cent of the estimated ₹2700 crores which should have been spent by now. India could potentially dilute some of the stringent localization requirements under the PLI-ACC scheme, which mandate a beneficiary must achieve a domestic value addition of at least 25per cent within two years and 60per cent domestic value addition within five years. Given the lack of a well-developed battery ecosystem, it will be crucial to come up with a realistic localization requirement and speed up fund disbursements given the heavy capex requirements of the industry. It could also extend the PLI benefits to a more diversified ecosystem of companies, particularly in the midstream segment, such as cathode and anode manufacturers. Encouragingly, the government has exempted import duties on raw materials and 35 capital goods used in battery cell manufacturing in the recent budget. It has also permitted the duty free import of li-ion battery scrap, which is an important step to promote refining capabilities in the country. This should help domestic cell companies become more competitive and get access to the entire value chain. The Indian government can go further by playing the role of an offtaker and seed initial demand by incentivizing the use of Made in India li-ion cells and batteries in specific use cases controlled or influenced by it . Some examples can be electric buses or BESS systems, which will ensure guaranteed demand for domestic battery cell manufacturing companies in the future. Furthermore, the government could incentivize faster EV deployment to create a larger market for domestic cell companies. EVs accounted for just under 50per cent of new car sales in China in CY 2024, which is the world's largest car market. The penetration level in Europe was 23per cent while the US's was around 10per cent . Total EV sales penetration in India across vehicle categories reached 7.8 per cent in FY 2024-25. Without strong consumer demand, even the most well thought-out plans on manufacturing and technologies will not get traction. While the Indian government has rolled out the PM E-Drive scheme to support EV deployment, it could consider supply-side policies, such as ZEV mandates, which require automakers to sell a certain percentage of EVs each year relative to their total sales, and played a crucial role in driving EV uptake in China. Increased manufacturing efficiency will be key for the private sector Indian li-ion cell companies must focus on building their manufacturing processes so as to reach a 95per cent + efficiency level within the first few years, before focusing on supply chain localization. Their initial focus should be to reduce the variability in the processes and supply chains of their international technology partner and the lines coming up in India. Cell companies should also work closely with automotive OEMs by receiving early feedback on cell specifications and shortening the turnaround time for cell qualification. The increase in tariffs by the Trump administration shouldn't be seen as one-off, or limited only to the US. Developing countries, such as India, will need to navigate growing trade barriers from advanced economies on the one hand, and China's dominance in manufacturing batteries and clean energy technologies on the other. With a large market and innovative startups, India is well placed – how adeptly it is able to unlock this potential will determine the future of its cell and battery industry. (Disclaimer- Siddharth Goel works as an Independent Consultant specializing in electric mobility and battery supply chains. Dev Ashish Aneja works as the head of cell supply chain at Ather Energy. The opinions expressed in this publication are entirely those of the authors. They do not purport to reflect the opinions or views of ETAuto.)
Time of India
09-05-2025
- Business
- Time of India
First round of Free Trade Agreement talks between India, New Zealand concludes
India and New Zealand are currently engaged in discussions for a potential Free Trade Agreement. These talks aim to enhance trade and investment between the two nations. Negotiations resumed in March 2025 after a decade-long pause. The FTA seeks to unlock new opportunities for businesses and consumers. Disparities in tariff structures and demands for dairy market access pose challenges. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The five-day talks between India and New Zealand for a proposed Free Trade Agreement (FTA), aimed at boosting bilateral trade and investment, will conclude on Friday, an official said. After a gap of about ten years, the two countries on March 16, 2025 announced resumption of negotiations for the FTA."The first round of negotiations started on May 5 here, (New Delhi)" the official and New Zealand began negotiating the Comprehensive Economic Cooperation Agreement (CECA) in April 2010 to boost trade in goods, services, and investment. However, after ten rounds of discussions, the talks stalled in February bilateral trade continuing to grow steadily, surpassing USD 1 billion during April-January 2025, the FTA would help unlock new avenues for businesses and to the think tank Global Trade Research Initiative (GTRI), a major challenge in the renewed talks will be the disparity in tariff Zealand's average import tariff is only 2.3 per cent, with over half of its tariff lines already duty-free, meaning Indian goods already have substantial access to its contrast, India's average tariff stands at 17.8 per cent, meaning it would have to make significant reductions, making a traditional FTA less attractive for India."As talks resume, both countries will need to find common ground on these issues to move forward successfully," GTRI Founder Ajay Srivastava New Zealand has demanded greater access to India's dairy market, which India has resisted to protect its domestic industry that supports millions of India's dairy imports from New Zealand are minimal (around USD 0.57 million). The country has not given duty concessions in the sector in any of its trade Zealand may look for duty concessions on products like meat and bilateral trade between the two countries stood at USD 873.4 million (exports USD 538.33 million and imports USD 335 million) in 2023-24 as against USD 1.02 billion in key goods exports to New Zealand include clothing, fabrics, and home textiles; medicines and medical supplies; refined petrol; agricultural equipment and machinery such as tractors and irrigation tools; auto; iron and steel; paper products; electronics; shrimps; diamonds; and basmati main imports are agricultural goods, minerals, apples, kiwifruit, meat products such as lamb, mutton, milk albumin, lactose syrup, coking coal, logs and sawn timber, wool, and scrap FY24, India's services exports to New Zealand stood at USD 214.1 million, while New Zealand's services exports to India totalled USD 456.5 key services exports include IT and software services, provided by companies such as Infosys and HCL, along with telecommunications services to support New Zealand's digital also exports healthcare services , including medical tourism , pharmaceutical research, and telemedicine. Financial services are another important area, with Indian banks and fintech companies offering digital payment Zealand's services exports to India are led by education services, with thousands of Indian students pursuing higher education in New services are also significant, as Indian tourists are drawn to New Zealand's natural landscapes and adventure Zealand provides fintech services, offering digital solutions to India's financial sector, and specialised aviation training programmes for pilots and cabin New Zealand firms offer niche IT services such as data analytics and automation solutions.
The Hindu
04-05-2025
- Business
- The Hindu
Sober verdicts: election results from Australia, Singapore
The re-election of the centre-left Labor party in the Australian general election on Saturday is a shot in the arm for Prime Minister Anthony Albanese, who became the first Australian leader to win a second term in more than two decades. The centre-right Liberal-National coalition was trounced, with Labor winning 87 of the 151 seats in the Australian parliament's lower house, against its previously razor-thin edge of 77 seats. Welcoming Mr. Albanese's win, Prime Minister Narendra Modi congratulated him for an 'emphatic mandate' and a commitment to take India-Australia bilateral ties and cooperation in the Indo-Pacific forward. Both countries signed an 'early-harvest' partial FTA (ECTA) in 2022, and have agreed to conclude a Comprehensive Economic Cooperation Agreement (CECA) by the end of this year. India will host the Quad summit later this year, and Mr. Albanese is expected to discuss closer cooperation on trade, resilient supply chains, and critical mineral and technology partnerships. The geopolitical changes wrought by China and the U.S. signal the need for Indo-Pacific region countries to diversify their economic interests and shore up each other's strategic needs. His re-election comes despite a rocky three-year term since 2022, as he faced low ratings on issues such as the economy, inflation and immigration; a recent poll said he would either lose or face a hung parliament. Given the timing of the turnaround, just after U.S. President Donald Trump took office, his win is seen as mirroring the results in Canada, where a dark horse centre-left Liberal party candidate, Mark Carney, won. As with the Conservative leadership in Canada, the Australian opposition's 'Liberal' candidate Peter Dutton was seen as a Trump policy admirer, and had taken a tough 'anti-woke' stance, pillorying Mr. Albanese for allowing too many immigrants into the country, and vowing to stand with Israel on Gaza. However, as Mr. Trump unleashed a barrage of measures including tariffs on countries, his policies also appear to have had a negative impact on Mr. Dutton's chances. Despite being a staunch U.S. ally, Mr. Albanese's relatively tough stand against the tariffs was seen favourably by voters — much as Mr. Carney's tough stand against the U.S.'s tariffs and threats won him votes. Another election result this weekend, in Singapore, saw a win, albeit quite expected, for Lawrence Wong, whose party won its 14th term. Mr. Wong too made Mr. Trump's policies a rallying cry during his campaign, even suggesting that countries would simply 'stop exporting to USA' if the tariffs were not taken down. In each of the wins, voters chose sober candidates seen as more rational at the wheel, and not those seen as tough leaders with strong rhetoric. This is a trend among America's closest allies, and Mr. Trump will have to pay heed to sane voices from outside his circle of advisers.
