India's Lithium-Ion Battery Revolution: Building Self-Reliance in the New Energy Age 

The Tipping Point: Why Now?

For decades, India remained largely dependent on fossil fuels and imported technology for its energy needs. However, a perfect storm of global events, policy shifts, and technological maturation has suddenly made lithium-ion battery manufacturing a national priority. The question isn't whether India needs this ecosystem—it's whether India can afford not to build it.

The Strategic Imperative

Energy Security in a Volatile World

India's energy import bill exceeded $185 billion in 2023, making the country vulnerable to global supply chain disruptions and price volatility. The Russia-Ukraine conflict and the COVID-19 pandemic have exposed the fragility of over-reliance on imports, particularly from China, which currently accounts for 60% of global lithium-ion battery production.

The Indian lithium-ion battery market size was estimated at USD 573.07 million in 2023 and is expected to expand at a CAGR of 38.7% from 2024 to 2030, driven primarily by the electric vehicle revolution and the integration of renewable energy.

The EV Revolution and Infrastructure Demands

India's electric vehicle market is experiencing unprecedented growth. The National Programme on Advanced Chemistry Cell (ACC) Battery Storage, which aims to establish Gigascale ACC and battery manufacturing facilities in India, has incentivized the adoption rate of this segment, leading to a 40% surge in the number of registered EVs in 2023 compared to 2022.

The government estimates reveal the scale of demand ahead:

• India will need a minimum of 10 GWh of Li-ion cells by 2022, about 60 GWh by 2025, and 120 GWh by 2030

• Current market projections show the sector reaching USD 5.78 billion in 2025

• Long-term forecasts suggest growth to USD 30,860.6 Million by 2032

The Game-Changing Policy Framework

Production Linked Incentive (PLI) Scheme: The Catalyst

The most significant policy intervention came with the National Programme on Advanced Chemistry Cell (ACC) Battery storage approved by the Union Cabinet on 12.05.2021 with a budgetary outlay of Rupee 18,100 crores. This wasn't just another subsidy scheme—it was a strategic investment in India's energy future.

The Indian government plans to allocate INR 181 billion (about USD 2.16 billion) over five years under the PLI scheme to establish 50 GWh of ACC production capacity and an additional 5 GWh of high-performance cell capacity in India.

The scheme's structure reflects a serious commitment:

• The subsidy in 2024-25 and 2025-26 is 100%, and it is reduced by 10% in 2026-27. The subsidy is further reduced by 20% in 2027-28, making it effectively 72% of the original subsidy

• The manufacturing facility, as proposed by the beneficiary firm, would have to be commissioned within 2 years

Budget 2025: Securing the Supply Chain

The Union Budget 2025-26 addressed a critical bottleneck in battery manufacturing. The Union Budget 2025-26 proposes to fully exempt basic customs duty on scrap of lithium-ion batteries and critical minerals to secure raw material availability for lithium battery manufacturing in India.

This "waste-to-wealth" approach represents a paradigm shift. India can become self-reliant in battery cell manufacturing if lithium remains in the country through recycling and is used in batteries once again, according to government officials.

What Changed Suddenly: The Perfect Storm

1. Geopolitical Awakening

The COVID-19 pandemic and subsequent supply chain disruptions exposed India's dangerous dependence on Chinese battery imports. The Galwan Valley clash in 2020 and ongoing border tensions accelerated the push for strategic autonomy in critical technologies.

2. Climate Commitments Meet Economic Reality

India's commitment to net-zero emissions by 2070 and 500 GW of renewable energy by 2030 created an urgent need for energy storage solutions. India aims to install renewable energy capacity of 170 GW by 2025. As part of this target, there is a high demand for efficient battery storage systems.

3. Technology Maturation and Cost Decline

Lithium-ion battery costs have dropped by over 85% in the last decade, making large-scale manufacturing economically viable. The technology has reached an inflection point where domestic production becomes competitive with imports when factoring in logistics, tariffs, and supply security.

4. Global Supply Chain Reshuffling

Western countries' desire to reduce China's dependence created an opportunity window for India to position itself as an alternative manufacturing hub, attracting both technology and investment.

Current Market Dynamics and Growth Trajectory

The numbers tell a compelling story of rapid expansion:

• Investment Momentum: Investments into Lithium-Ion Battery manufacturing in the country are expected to exceed $3 billion by 2024

• Market Growth: Different projections show varying growth rates, but all point upward—from a CAGR of 22.2% from 2024 to 2033, to some estimates suggesting even higher growth

Key players:

• Ola Electric: Leading the charge with a 20 GWh capacity awarded under the PLI scheme, starting with 5 GWh at their Tamil Nadu gigafactory that became operational in early 2024. The company plans to eventually expand capacity to 100 GWh annually.

• Agratas (Tata Group): The Tata Group's battery manufacturing subsidiary has ambitious plans with a 20 GWh facility planned in Sanand, Gujarat, backed by an investment of ₹9.51 billion. The company is also setting up a 40 GWh plant in the UK and has partnered with Tata Technologies to accelerate product development timelines.

• Reliance Industries: Won government incentives to manufacture up to 10 GWh of Advanced Chemistry Cells, planning to industrialize sodium-ion cell production at a megawatt level by 2025. Leveraging expertise from their US subsidiary Lithium Werks for lithium-ion battery technology.

• JSW Group: Planning a massive 50 GWh battery plant set for completion by 2028, currently in discussions with leading battery manufacturers for technology partnerships.

• Amara Raja Energy & Mobility: Through their subsidiary Amara Raja Advanced Cell Technologies, they're among the seven major bidders collectively applying for 70 GWh cumulative capacity under the government's PLI scheme.

• Exide Industries: Invested Rs 1,285 crore as equity investment in FY24, bringing total investment in their energy solutions subsidiary to Rs 2,302 crore by March 2024.

• Traditional Battery Manufacturers: Companies like TDSG (TDS Lithium-Ion Battery Gujarat Private Limited) are establishing manufacturing plants in Gujarat, while established players pivot from lead-acid to lithium-ion technologies.

• Agratas (Tata Group): The Tata Group is planning to set up a 20 GWh battery manufacturing facility in Sanand, Gujarat, through its clean energy subsidiary Agratas, with an investment of ₹9.51 billion. India Lithium-ion Battery Market Size | Industry Growth & Trends Report 2030. Agratas is also setting up a 40 GWh battery manufacturing plant in the UK. India Lithium-ion Battery Market Size | Industry Growth & Trends Report 2030, and has partnered with Tata Technologies to accelerate product development timelines 

The Manufacturing Renaissance

PLI Success Stories

A total of 4 companies are selected for incentive under the Production Linked Incentive (PLI) Scheme for ACC battery storage, with selected ACC battery storage manufacturers must set up a production facility within two years.

Key Players Emerging

TDS Lithium-Ion Battery Gujarat Private Limited (TDSG), Ola Electric, Agratas (Tata Enterprise), Bharat Electronics Limited (BEL), Telemax India Industries Pvt. are among the key players driving this transformation.

Strategic Advantages: Why India Can Win

1. Manufacturing Ecosystem

India's established automotive and electronics manufacturing base provides the foundation for battery production. The presence of major OEMs creates immediate demand and supply chain synergies.

2. Raw Material Strategy

While India lacks significant lithium reserves, the focus on recycling and critical mineral imports through duty exemptions creates a sustainable supply model. The elimination of Basic Customs Duty (BCD) for multiple fundamental lithium-ion battery production materials significantly improves cost competitiveness.

3. Talent and Innovation

India's engineering talent pool and growing research ecosystem in electrochemistry and materials science provide the human capital needed for innovation and scale-up.

4. Market Size and Growth

With the world's third-largest automotive market and ambitious renewable energy targets, India offers both scale and growth potential that few other markets can match.

Challenges and Road Ahead

Technology Gaps

While India is building manufacturing capacity, significant technology gaps remain in advanced cell chemistry, battery management systems, and recycling technologies. Continued R&D investment and international partnerships will be crucial.

Supply Chain Vulnerabilities

Despite policy support, dependence on imported raw materials and equipment remains high. Building a more integrated supply chain from mining to recycling will require sustained effort over the next decade.

Competition and Quality

Competing with established players like CATL, BYD, and Tesla requires not just cost competitiveness but also quality, reliability, and continuous innovation.

The Circular Economy Opportunity

India can become self-reliant in battery cell manufacturing if lithium remains in the country through recycling and is used in batteries once again. This circular approach offers multiple benefits:

• Reduced import dependence

• Environmental sustainability

• Economic value creation from waste

• Strategic material security