Tata Agaratas Energy Storage Solutions, a subsidiary of Indian conglomerate Tata Group, has signed a memorandum of understanding with the Gujarat state government to set up a battery factory in the state, Kallanish reports.

With an initial investment of $1.6 billion, this will be India’s first lithium-ion cell manufacturing gigafactory, says a press release issued by the state government. The plant will have an initial capacity of 20 gigawatt-hours and is expected to generate employment for over 13,000 people. 

The deal comes in an effort to boost the state’s electric vehicle production to reduce carbon emissions. It is expected to help the state meet its targets of adopting 100% electric vehicles and curbing carbon emissions by 50% by 2030. However, the construction timeline of the plant is unclear.

India aims to be net zero by 2070, with an ambitious target for electric vehicles to constitute 30% of all new automotive sales by 2030. However, it is heavily dependent on battery imports from China, Japan and South Korea for its EV production. 

The country has been attempting to boost its battery material testing and manufacturing capacity. Local battery materials manufacturer Epsilon Advanced Materials (EAMPL), for example, recently inked a deal with Japanese research company KRI Inc to set up a 100 GWh battery materials testing facility in India.

Tata Motors, part of the Indian conglomerate and owner of British carmaker Jaguar Land Rover, is expected to announce a gigafactory investment in Europe soon.