India’s battery-cell imports are soaring while its flagship manufacturing scheme struggles to deliver, prompting a proposed shift towards supporting the materials and components beneath the industry.
India’s efforts to build a domestic battery-cell industry are running into a familiar problem: demand is rising far faster than local production. Commerce ministry data cited by Business Today show battery-cell imports climbed 94% year on year to Rs 15,721 crore in the first quarter of 2026-27, after a 159% jump in July 2026 alone. For the full 2025-26 financial year, imports of lithium-ion cells reached Rs 41,667 crore, up 64%, with China supplying about 85% of the total.
The surge comes as New Delhi pushes harder on electrification through programmes such as PM E-Drive, PM-eBus Sewa and the production-linked incentive scheme for automobiles and components. Yet the supply side has barely moved. Business Today reported that, despite the size of the market, most Indian companies still do not have the technical depth to manufacture lithium-ion cells at scale, leaving domestic supply negligible.
The centrepiece of the government’s response has been the Rs 18,100-crore advanced chemistry cell incentive scheme approved by the Union Cabinet in May 2021, which was designed to support 50 GWh of capacity. But the programme has fallen well short of its ambition. Business Today said only Ola Cell Technologies has begun commercial operations, and even that is at 2.5 GWh against an award of 20 GWh. No beneficiary has yet received an incentive payment, while a separate industry note and official government material both describe the scheme as a core part of India’s drive to reduce import dependence.
Industry executives argue the fault lies in the order of policy support. Anurag Choudhary, chairman, managing director and chief executive of Himadri Speciality Chemical, told Business Today that India needed incentives for cell components before it could hope to scale cell assembly. He said a country cannot expect to build a full battery industry while still importing the raw materials needed to make the cells themselves.
That argument is echoed by Vikram Handa, founder and managing director of Epsilon Advanced Materials. He told Business Today that electrolyte is the only major component currently bought locally, while the rest of the material chain is still dominated by China. Handa said more than 90% of cathode and anode active materials are processed there, and warned that without domestic sourcing of those inputs, India would remain dependent on imports across much of the value chain.
The government is now considering a new Rs 12,000-crore incentive scheme focused not on finished cells, but on the materials that go into them, including cathode and anode active materials, electrolytes and copper-foil separators. That would mark a shift towards building the upstream ecosystem first. Choudhary said such a move is overdue, while Handa said the industry needs long-term policy backing as well as more patient capital and sustained spending on research and development.
Some companies are already trying to bridge the gap. Himadri plans to open a 2,000-tonne cathode active materials plant in Kolkata by December 2026 and is working on a much larger facility for FY28. Epsilon has started an anode-material plant in West Bengal and expects to expand capacity sharply by 2028. Amara Raja Energy & Mobility, which has begun trial production at its customer qualification plant in Telangana, is also gradually substituting imported inputs with local materials as they become available.
Even so, the economics remain challenging. Choudhary said cells made in India are likely to cost about 20% more than Chinese imports, while an executive at another Indian cell company told Epsilon’s Handa that a unit built entirely from the cheapest imported Chinese inputs would still come out roughly 25% more expensive than a Chinese-made cell. That cost gap helps explain why progress has been slow, even as large groups such as Reliance Industries and JSW Group continue to chase technology partnerships or wait for better terms.
The broader strategic concern is that India wants battery self-reliance without yet controlling the core technology. At the BRICS summit, Prime Minister Narendra Modi warned against the weaponisation of technology and critical minerals, a theme echoed by industry leaders who say access to cell know-how remains tightly held. Reliance’s Anant Ambani has described battery technology as a strategic necessity, while JSW’s Parth Jindal has said lithium iron phosphate technology is not yet available to the group. For now, India’s battery ambitions rest on whether policymakers can turn a scheme aimed at cells into one that also builds the supply chain beneath them.
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