India's $38 Billion Battery Plan for Energy Self-Reliance

Introduction: India's Strategic Battery Initiative

India is embarking on a comprehensive, multi-billion-dollar strategy to establish a self-reliant battery manufacturing ecosystem. The government plans to invest approximately $18 billion to develop 47 gigawatts (GW) of battery storage capacity. A central element of this initiative is the creation of an Approved List of Battery Manufacturers (ALBM), a framework designed to prioritize domestic producers for government-supported projects. This move aims to reduce the country's heavy reliance on imports, particularly from China, and build a secure, domestic supply chain for critical energy components. The plan, part of the 'India Battery Vision 2047', encompasses the entire value chain, from sourcing critical minerals to recycling end-of-life batteries, positioning India as a future leader in the global energy storage market.

The Approved List of Battery Manufacturers (ALBM)

The proposed ALBM is modeled after a similar successful framework in the solar sector, the Approved List of Models and Manufacturers (ALMM). It will function as a non-tariff barrier, effectively creating a list of certified vendors eligible to participate in government tenders for battery energy storage systems (BESS). By mandating the use of domestically produced batteries in state-backed projects, the government intends to stimulate local manufacturing, attract investment, and ensure quality standards. This measure also addresses national security concerns associated with using foreign-made equipment in critical power infrastructure. The draft norms and a phased localisation timeline for the ALBM are expected to be released within the current fiscal year, providing a clear roadmap for manufacturers.

The Role of the Production-Linked Incentive (PLI) Scheme

Supporting the ALBM is the Production-Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC) battery storage, approved in May 2021 with an outlay of ₹181 billion. The scheme's primary objective is to establish 50 GWh of Giga-scale ACC manufacturing capacity in India. It incentivizes companies to build large-scale factories by offering subsidies tied to production output. The PLI scheme mandates stringent value addition, quality benchmarks, and phased localisation targets to ensure that the manufacturing ecosystem develops robustly and becomes globally competitive. So far, 40 GWh of capacity has been allocated to beneficiaries including Reliance New Energy, Ola Electric, and Rajesh Exports, forming the foundational layer of India's battery production ambitions.

Progress, Gaps, and Future Targets

Despite the ambitious goals, the rollout has faced challenges. As of early 2026, only 1.4 GWh of the 50 GWh target under the ACC PLI scheme has been commissioned, primarily from Ola Electric. This represents just 2.8% of the initial target, highlighting significant delays in project execution. However, the government and private sector remain committed. The long-term vision includes supporting an additional 5 GWh of next-generation technologies, such as solid-state batteries. Furthermore, the government is considering mandatory localisation of at least 50% for non-cell BESS components like battery management systems, inverters, and containers, which currently account for about 35% of total BESS costs and are largely imported.

Securing the Supply Chain

A critical pillar of India's battery strategy is securing the supply chain for raw materials. The National Critical Minerals Mission, with a funding allocation of ₹163 billion through 2031, focuses on the exploration, mining, processing, and recycling of essential minerals like lithium. The Geological Survey of India has intensified exploration activities, and several mineral blocks have already been auctioned. To supplement domestic efforts, India is also pursuing overseas assets. Khanij Bidesh India Limited (KABIL), a state-owned joint venture, has acquired lithium brine blocks in Argentina to ensure a steady supply. On the recycling front, the Battery Waste Management Rules of 2022 mandate extended producer responsibility, with over 3,300 producers and 43 recyclers already registered, processing over 15,000 tonnes of battery waste to date.

Private Sector Investment Surge

The government's policy push has catalyzed a wave of private sector investment, signaling strong market confidence in India's battery manufacturing future. Several major corporations have announced large-scale projects that go beyond the PLI scheme's scope. These investments are crucial for building the capacity needed to meet the projected surge in demand from electric vehicles and renewable energy storage.

Market Demand and Global Competition

India’s annual demand for lithium-ion batteries is projected to grow nearly 19-fold, from 13 GWh in 2024 to an estimated 244 GWh by 2035. This explosive growth is driven by the rapid adoption of electric vehicles across all segments and the increasing need for grid-scale energy storage to support renewable power sources. While this presents a massive opportunity, Indian manufacturers face stiff competition from established Chinese players, who benefit from economies of scale and lower logistics costs. To succeed, Indian companies must not only scale up production but also innovate and achieve cost competitiveness. The government's support is designed to level the playing field and foster a domestic industry capable of competing globally, with potential export opportunities to markets like Europe.

Conclusion: Building a Resilient Energy Future

India's strategy to build a domestic battery ecosystem is a critical step toward achieving energy security and its climate goals. Through a combination of policy instruments like the ALBM, financial incentives from the PLI scheme, and a focus on the entire supply chain, the country is laying the groundwork for a self-reliant and globally competitive industry. While significant challenges in execution and scaling remain, the strong commitment from both the government and the private sector provides a solid foundation. The successful implementation of this vision will be pivotal in reducing import dependency, lowering EV costs, and establishing India as a key player in the future of global energy storage.