India is poised to witness a monumental shift in its lithium-ion (Li-ion) battery landscape as demand surges from 15 GWh in FY24 to an estimated 54 GWh by FY27, and a staggering 127 GWh by FY30. This rapid growth is being driven largely by the expanding adoption of electric vehicles (EVs) and consumer electronics.
Currently reliant on imports for nearly its entire Li-ion battery needs, India is charting a path to self-reliance. By FY27, domestic manufacturing is expected to meet 80% of the country’s demand, significantly reducing import dependency to just 20%.
Government Push through PLI Scheme
A major catalyst for this transformation is the Production Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC) batteries. With an allocation of ₹18,100 crore over five years, this initiative is set to boost domestic production. Several leading companies have already secured support under this scheme:
- Ola Electric Mobility: 20 GWh facility, expected commissioning in 2025.
- Reliance New Energy: 15 GWh capacity.
- Rajesh Exports: 5 GWh capacity.
- Additional allocations include 10 GWh for other firms.
Firms are required to achieve a minimum of 25% domestic value addition initially, escalating to 60% within five years. They must also invest ₹225 crore per GWh of committed capacity within two years.
Overcoming Capital Challenges
Li-ion battery manufacturing is capital-intensive, presenting operational challenges. Companies must rely heavily on initial investments to maintain momentum during project construction. Despite these hurdles, state incentives, including capital subsidies, electricity tax exemptions, and interest subvention, are paving the way for faster capacity additions.
Global Landscape
Globally, China, the US, Poland, Sweden, and South Korea dominate Li-ion battery production, accounting for 93% of total capacity. China remains the largest importer of raw lithium and the leading producer of Li-ion batteries.
India’s push for self-reliance not only promises to bolster its domestic EV and electronics industries but also positions it as a significant player in the global Li-ion battery ecosystem.
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