Reliance New Energy risks fines up to Rs 125 crore for missing battery plant deadlines under India’s PLI scheme
Reliance New Energy Ltd faces potential financial penalties for failing to build its scheduled battery cell production facility. The company obtained the India Production-Linked Incentive (PLI) scheme award in 2022 to reduce India’s electric vehicle battery imports. The plant has missed the timeline for its establishment which was specified by the requirements. The penalty facing Reliance New Energy reaches up to Rs 125 crore ($14.3 million) due to the missed deadline.
Failure to Meet Timelines Risks Fines
The shortage of production goals proved significant because the program was established as part of Prime Minister Narendra Modi’s initiative to enhance local production. Under the PLI scheme, the government offers financial incentives to battery manufacturing companies that achieve their production goals. Reliance New Energy together with Rajesh Exports Ltd. and other companies have failed to reach their set deadlines. Information from knowledgeable sources indicates Reliance New Energy might be at risk of receiving penalties because of its performance.
Reliance New Energy risks being penalised after failing to set up a battery cell plant that formed part of PM Modi’s push to cut import dependence.#Reliance #mukeshambani #reliancenewenergyhttps://t.co/tNZ6FuRp8t
— Business Standard (@bsindia) March 3, 2025
Reliance has changed its focus and the company directs its investments toward green hydrogen development as part of its strategic plans. The company made a strategic shift because of mounting difficulties faced by battery producers in the worldwide lithium-ion cell market due to capacity excess and unstable cell pricing.
Other Companies Face Similar Penalties
Rajesh Exports Ltd. along with other companies running the battery manufacturing initiative stands to receive penalties because they have not met the required deadlines. Under the PLI scheme, both Reliance and Rajesh Exports had stated their intentions to meet their production goals for potential subsidies valued at Rs 18,100 crore. Reliance faces delays in its local lithium-ion battery manufacturing technology development which impedes its advancement.
Ola Electric’s battery manufacturing unit demonstrates notable advancement while competing with other companies in the market. The trial production at Ola Electric started in March 2022 and the company intends to launch commercial operations in the middle of 2025 as it successfully fulfills its PLI obligations. The government scheme demonstrates divergent levels of achievement by individual businesses participating in it.
Challenges to the Make in India Vision
Reliance New Energy’s manufacturing delays validate the implementation obstacles that stand against India’s ‘Make in India’ strategic target. For several years Prime Minister Modi has pursued expansion of manufacturing sectors to grow their share of the national GDP. The nation’s manufacturing sector dropped its contribution rate to GDP from 15% in 2014 to 13% in 2023.
