Sinha said many EV components are being made in India and schemes like PLI are incentivizing production
EV companies need to focus on R&D activities and reach out to the academic institutions and the government if they need any kind of support, said Sudhendu Sinha, Advisor to Niti Aayog on e-mobility. In an interview with Outlook Business, Sinha talked about the importance of R&D in India’s manufacturing journey. Edited excerpts:
How can the government and the private sector contribute to developing a strong EV component supply chain?
It needs two things. One is the need for R & D initiatives and the other is the need of creating a manufacturing base in India so that you don't have to import.
Now how do you create it? You create it by incentivizing the production processes. Therefore, the government of India has launched a production linked incentive scheme for automobile and automobiles components. A Large amount of money is allocated there.
Under the (PLI) scheme, champion OEMs have been identified. Further categorisation is made to identify who are into telematics, electronics and so on.
So, through PLI schemes, we are supporting these component manufacturers. Many of these EV components have started to be produced in India. The point is high value components need to be made in India.
China has put in a lot of efforts in electric mobility and in the R & D ecosystem for a very long period of time. So, we are competing against someone who has put in 30 years of consistent effort in R&D.
So you will have to give some time to things to develop.
Private players want the government to continue R&D spending.
The government is going to finalise the Jai Jawan, Jai Kisan, Jai Vigyan and Jai Anusandhan scheme which is aimed at creating an R&D ecosystem of Rs 1 trillion.
But it is the private sector that needs to make efforts (in R&D) and tell us what’s new that they want to create. They just keep working on the assembly line.
There are various centres of excellence in 16 IITs across India. They (private sector companies) can connect to these institutions to execute their ideas.
Why will someone fund you? You need to tell us what you want to do. Private sector owns the manufacturing side. They will have to come to us if they want to create something new. Then we can evaluate and decide accordingly.
How do you assess the decline in the sale of electric buses in FY25?
Don’t use the word sale. It’s a confusing word. There is no decline in sales. Look at how many orders have been placed and how many buses have been delivered. Orders are given on a rolling basis. Orders placed earlier were delivered in FY25. The government is going to place an order of 10,000 electric buses soon through CESL (Convergence Energy Services Limited) under the Pradhan Mantri e-Bus Sewa Scheme. A tender of this scale has never happened in the world before. Bid finalisation is under process for that.
So the orders placed this year will be supplied next year. Currently, almost all the e-bus OEMs including Tata Motors, JBM, and Switch Mobility have good order books. Recently, 400 small e-buses were deployed in Delhi. Almost 1,000 e-buses are ready to be inducted in Delhi.
What is the progress on the Payment Security Mechanism (PSM) scheme launched last year?
PSM has not kicked in yet. Though, all stakeholders are ready to be a part of it. Many states have consented to their participation. It is an innovative instrument where the service provider is given a guarantee. The service provider can be an OEM, an operator or a deployer. So, you are given a kind of guarantee that your payment will not be stuck and you will continue to get money for the service that you provide. There is a mandate given by the participating states that in the event of multiple failures, the money can be deducted by RBI and put to the corpus.
The Government of India is the major contributor to that corpus. The US government and some of the big philanthropic organizations like the Ford Foundation, Ikea Foundation and The Rockefeller Foundation have also contributed.
This (PSM) will be applicable for all the e-buses which are being purchased through the government of India's finances, whether it is the PM E-bus Sewa or the PM E-DRIVE or any other scheme.