Mukesh Ambani's Reliance New Energy at Risk of Rs 1.25 Bn Fine: Here's Why

Mukesh Ambani-led Reliance Industries's New Energy arm has come under the government’s scanner for its failure to set up a battery cell manufacturing plant and consequently faces risks of government action, including a fine of around Rs 1.25 billion. Reliance New Energy, which had bagged a bid for cell manufacturing under Prime Minister Narendra Modi’s Production-Linked Incentives (PLI) scheme in 2022, has reportedly missed the deadline, Bloomberg reported, citing sources. 

Apart from Reliance New Energy, Bangalore-based gold retail multinational company Rajesh Exports is also on the government’s radar for its failure to meet the deadline of building the cell manufacturing unit. The company, which is India’s biggest gold jewellery manufacturer, had no prior experience in battery manufacturing.

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Reliance New Energy had initially bagged the contract for 5 GWh in 2022 and recently, in February this year, the company secured an agreement for another 10 GWh with the ministry of heavy industries.

Setback for India’s self-reliance dream? 

Reliance New Energy, Rajesh Exports, Ola Electric Mobility and Hyundai Global Motors Company were the four companies that won bids to produce battery cells in order to boost domestic manufacturing and reduce import dependence. The companies under the scheme were eligible for nearly Rs 181 billion in subsidies for manufacturing 30 gigawatt-hour capacity of advanced chemistry cell battery storage.

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According to a Bloomberg report, the companies under the scheme were required to complete a minimum ‘committed capacity’ coupled with domestic value addition of 25% within two years of getting the contract and 50% within five years. 

The PLI scheme was launched in 2020 to take India on the path of self-reliance. The scheme focused on 14 critical manufacturing sectors, including Advanced Chemistry Cell (ACC) Battery. ACC are new-generation technologies cell that help to store electric energy in form of electrochemical or as chemical energy and later can be converted to electric energy. The key focus of the scheme is to enhance value addition, produce globally competitive batteries and deliver beneficiary companies batteries that support electric vehicles and renewable energy storage. 

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