This year's Union Budget is likely to pump in some steam into the sales of electric bikes in the country that use imported batteries to power them.
The country does not have an indigenous manufacturer of electric batteries now, and they are mostly imported from China. Sohinder Gill, chief executive officer of Hero Electric said, "Currently,there is no indigenous manufacturer of electric batteries in the country. All batteries are imported.
Reading out the Union Budget of 2011-12, finance minister Pranab Mukherjee said that the full exemption from basic customs duty and a concessional rate of central excise duty of 4 per cent for specified parts of electric vehicles that was announced in the last budget would be extended to batteries imported by manufacturers.
This would result in a reduction of around Rs 1500 in the cost of an electric battery that now costs around Rs 6500. A consumer needs to replace the battery of his bike once a year. As Gill explains, reduction in battery cost is equivalent to reduction in fuel cost for an electric vehicle. "At the current rate of 22 per cent import duty, manufacturers can pass on the benefit to the consumers and reduce the cost of the battery."
