The Indian government has levied a significant penalty on a unit of Reliance Industries Limited (RIL) for failing to meet the stipulated deadline for setting up a battery cell manufacturing plant. This project was sanctioned under the Production Linked Incentive (PLI) scheme to promote domestic manufacturing of advanced chemical cells (ACC).
Reliance Penalized for Delay in PLI Program Compliance
On March 3, 2025, Reliance New Energy Battery Storage Limited (RNEBSL), a wholly-owned subsidiary of Reliance Industries, received a notice from the Ministry of Heavy Industries imposing a daily penalty of 0.1% on the performance security (₹50 crore) for failing to achieve Milestone-1 of the project.
As per reports, the penalty, calculated up to March 3, 2025, amounted to ₹3.1 crore, with the penalty continuing for each additional day of delay. The company has sought an extension for Milestone-1 but has not disclosed the reason behind the delay or the revised timeline for completion.
What is the PLI Scheme and Why is It Important?
The Production Linked Incentive (PLI) scheme is an initiative by the Indian government aimed at boosting domestic manufacturing in key sectors, including battery storage technology. Under this scheme, companies receive financial incentives based on their production performance.
In 2022, RNEBSL secured approval under this scheme to establish a 10 GWh battery manufacturing facility. The government had allocated around $400 million (approximately ₹3,300 crore) in incentives to RNEBSL as part of India’s energy security and sustainability drive.
Understanding the Fine and Its Impact on Reliance Industries
The penalty imposed on Reliance Industries is a direct result of its failure to meet agreed timelines. This delay affects not only Reliance but also the broader objectives of India’s green energy transition and domestic battery production capacity.
The financial impact of the fine is relatively small for a conglomerate of Reliance’s scale. However, it raises concerns over execution delays, which could affect future government contracts and the company’s credibility in clean energy initiatives.
Reliance’s Response to the Government’s Notice
RNEBSL has confirmed the receipt of the penalty notice but has chosen not to disclose the specific reasons behind the delay in achieving Milestone-1. Instead, the company has requested an extension of the deadline from the Ministry of Heavy Industries. The government’s response to this request remains uncertain.
