New Delhi: India is putting the final shape on a plan to build at least four Tesla-style giga factories to manufacture batteries with an investment of around $4 billion, as the country prepares to switch to electric vehicles to curb pollution and cut its dependence on foreign oil.

“We are moving ahead with the plan and a cabinet note for the same has been floated," said a senior government official, requesting anonymity. “Why should India import battery storage units when we have the largest market here?"

Aimed at securing India’s energy needs, the plan to set up these factories of 10 gigawatt hours (GWh) each is being helmed by federal policy think tank NITI Aayog and looks to accomplish what Tesla has done at its Gigafactory in Nevada, US.

“The focus on battery storage manufacturing will enable India to develop an electric vehicle ecosystem including manufacturing and R&D, an opportunity the country missed while developing the solar industry," said Rupesh Agarwal, founder of AEM, an electric mobility company.

As part of the plan, the government may offer a raft of incentives to manufacturers such as concessional financing options with around 3% foreign exchange hedge on overseas loans and a fixed 3% interest subvention on loans availed in Indian rupees. In addition, a reduction in minimum alternative tax (MAT) may be offered.

According to information reviewed by Mint, the support extended by the government for advanced chemistry cells and battery manufacturing may also include an investment-linked tax incentive under Section 35 AD, a deemed infrastructure status and a suitable basic customs duty safeguard. It may also offer an output-linked subsidy on kilowatt hour (KWh) of cells sold.

Apart from electric vehicles, such battery storages will cater to the consumer electronics industry and electricity grids, given the intermittent nature of electricity from clean energy sources such as solar and wind.

According to a conservative scenario envisaged by NITI Aayog, India will need six such gigawatt-scale facilities (of 10 GWh each) by 2025 and 12 by 2030. While this doesn’t include the export market potential, the base scenario envisions 11 such giga factories by 2025 and 24 by 2030.