India’s lithium-ion cell imports are soaring while its flagship manufacturing scheme delivers little output, exposing gaps in technology, raw materials and investment.
India’s battery-cell ambitions are colliding with a hard industrial reality: demand is rising far faster than domestic supply. Commerce ministry data show imports of lithium-ion cells jumped 94% year on year to Rs15,721 crore in the first quarter of 2026-27, while July imports alone surged 159% to Rs7,209 crore from Rs2,772 crore a year earlier. For FY26, cell imports reached Rs41,667 crore, with China supplying about 85% of the total, underlining how dependent the market remains on overseas sourcing.
The government has tried to respond through electrification incentives, including PM E-Drive, PM-eBus Sewa and the production-linked incentive scheme for automobiles and auto components. Yet the flagship Rs18,100-crore Advanced Chemistry Cells programme, approved in May 2021 to create 50GWh of domestic capacity, has delivered only limited progress. According to a recent government update, 40GWh has been awarded to four beneficiaries, but production has scarcely started and no participant has yet received an incentive payment. Business Today reported that Ola Cell Technologies is the only beneficiary with commercial operations under way, and even that is at a far smaller scale than the 20GWh it won.
The problem is not simply one of factory construction. Industry executives argue that India lacks the upstream ecosystem needed to make cells competitively at scale. Anurag Choudhary, chairman, managing director and chief executive of Himadri Speciality Chemical, told Business Today that incentives should have begun with raw materials rather than finished cells, because without local inputs India remains dependent on imports for much of the value chain. Vikram Handa, founder and managing director of Epsilon Advanced Materials, said electrolyte is the only major component commonly bought locally, while most cathode and anode materials are still processed in China. He added that more than 90% of those materials are handled there.
That assessment has helped push policymakers towards a second scheme, valued at about Rs12,000 crore, aimed at battery-cell components such as cathode and anode active materials, electrolytes and copper-foil separators. The logic is to build a domestic materials base before expecting a mature cell industry to emerge. The shift also reflects a broader pattern in manufacturing policy: India has made far more visible gains in solar production. Mercom, cited by PV Magazine, said the country added 50.6GW of solar module capacity and 9.7GW of cell capacity in the first half of 2026, suggesting that where incentives, supply chains and investment align, local manufacturing can scale quickly.
Even so, the battery sector remains hampered by technology access, capital intensity and thin margins. Choudhary said locally made cells are expected to cost about 20% more than Chinese imports, while Handa argued that firms need longer payback periods and much heavier research spending if they are to compete. Some companies are trying to learn by doing. Amara Raja Energy & Mobility has begun substituting selected Indian materials in batches at its customer qualification plant in Telangana, while Reliance Industries and JSW Group continue to seek technology partners for planned projects. As things stand, India wants to localise battery manufacturing, but it is still missing the technology, raw materials and commercial incentives needed to complete the chain.
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