Tata, an Indian conglomerate with diverse interests including software, steel, cars, and airlines, announced plans on Wednesday to build an electric vehicle (EV) battery plant in Britain. This development is seen as a significant boost for the UK's car industry, as it strives to establish local battery production to ensure its long-term sustainability.

The investment for the factory amounts to GBP 4 billion (approximately Rs. 32,800 crore), as confirmed by Tata. The British government, while not immediately disclosing the specifics of its support in the deal, welcomed the company's decision.

British Prime Minister Rishi Sunak acknowledged the importance of Tata Group's multi-billion-pound investment in the new battery factory, emphasizing its contribution to the strength of the country's car manufacturing industry and its skilled workforce.

According to the government, the establishment of the factory is expected to generate up to 4,000 jobs, with additional employment opportunities projected within the supply chain.

There had been speculation for months regarding the location of Tata's battery plant. This achievement represents a significant win for the UK, which is striving to catch up in the global race for local electric vehicle battery production. Such capacity is crucial for automakers who rely on proximity between battery production and their car manufacturing facilities.

The move towards homegrown battery production will not only aid British automakers in complying with post-Brexit trade rules but also enable them to meet local sourcing requirements for electric vehicle components. From 2024, these regulations will be necessary to avoid tariffs on UK-EU trade.

The government has been in discussions with the European Union to negotiate the easing of these rules. The potential imposition of tariffs prompted car giant Stellantis to warn of potential factory closures and job losses. Meanwhile, the UK government has expressed concerns about the US Inflation Reduction Act, which offers significant subsidies to green industries, as it lacks the substantial funding required for similar measures.

According to the BBC, the government is expected to provide Tata with subsidies worth hundreds of millions of pounds, a detail that will be subject to reflection and scrutiny.

Darren Jones, Chair of the Parliament's Business Committee, welcomed Jaguar Land Rover's decision to invest in battery production in the UK but expressed the need to review the subsidy package required to secure the investment.