Amid the evolving landscape of the global battery manufacturing market, India is rapidly emerging as a key player, driven by government initiatives and strategic investments.
Omdia view
Summary
India is rapidly emerging as a player in the global battery manufacturing landscape, seeking to disrupt China’s growing dominance while addressing the growing demand for energy storage. This growth is being driven by government initiatives, growth of cleantech demand, and low cost of manufacturing.
Strategic mineral moves
The Indian battery market is poised to grow from $8.4bn in 2025 to $18.3bn by 2030, with particular demand coming from the domestic electric vehicle (EV) market and renewable storage systems, which are vital for the transition to sustainable energy solutions. To help meet demand, India has been actively pursuing partnerships and strategic investments to secure its supply of critical minerals. In March 2022, the India-Australia Critical Minerals Investment Partnership was established to focus on developing supply chains for essential minerals like lithium and cobalt. KABIL, founded in 2013 as a joint venture of three government enterprises to ensure mineral and metal security, signed agreements with Argentina for lithium block exploration and development. KABIL also expressed interest in developing projects to explore lithium salts and copper in Chile. The Ministry of Mines has also signed a memoranda of understanding (MoU) for possible exploration and acquisitions of mines in at least eight African nations. These types of initiatives are crucial to compete with China, which holds a staggering 80% share of global lithium production (despite holding 7% of global reserves), because the global appetite for lithium demand in 2025 is expected to be 50% higher than in 2023, and 350% higher in 2030.
EU battery boost
India also joined forces with the EU to promote start-up collaboration on EV batteries. This initiative is part of the India-EU Trade and Technology Council, established in April 2022, which aims to enhance the cooperation between European and Indian small and medium-sized enterprises (SMEs) and startups in the clean and green technologies sector. The intended exchange of knowledge and expertise will be crucial in progressing the circularity of rare materials and transitioning toward carbon neutrality. Another key technology development came in June 2024, when Indian battery maker Amara Raja Energy & Mobility signed a licensing agreement with Gotion InoBat Batteries (GIB), a subsidiary of China-based Gotion High-Tech, to produce lithium-ion batteries in India.
PLI power play
To position India as a global hub for advanced chemistry cell (ACC) production, the government launched the INR18,100 crore Production Linked Incentive (PLI) scheme, incentivizing local production, reducing reliance on imports, and developing a strong domestic ecosystem. Future expansions of the PLI scheme aim to include battery components like cathodes and anodes that align with India’s EV adoption goals. Complementary measures such as tax breaks, subsidies, and concessional financing further attract investments, with companies including Ola Electric and Reliance New Energy leveraging these benefits to establish manufacturing facilities and gigafactories. In October 2024, the government announced plans to invite bids for constructing 10 GWh of battery energy storage systems. This move aims to allocate the remaining funds set aside for the sector under the PLI scheme for ACCs.
Additionally, India’s focus on lithium iron phosphate (LFP) cells, supported by PLI and cost advantages, could make Indian-made LFP cells up to 50% cheaper than Chinese counterparts, solidifying India’s competitive edge in global battery manufacturing.
Jobs and skills surge
The growth of the battery manufacturing industry is creating numerous job opportunities, from factory workers to researchers and engineers, boosting employment rates and contributing to broader economic growth. However, the rapid expansion of the battery manufacturing industry exposed a gap in the availability of skilled labor, with demand for technical expertise outstripping supply. To address this, both the government and the private sector are investing in programs to upskill workers. Such initiatives are critical for developing expertise in battery assembly, quality control, recycling, and so on.
Future-ready battery sector
India’s battery manufacturing sector is prepared for future demand and is supported by a robust legislative framework, strategic investments, and innovative technologies. While challenges like raw material dependency and labor shortages persist, proactive measures and government support are paving the way for a sustainable and globally competitive industry. With continued efforts, India is well on its way to becoming a leader in the global battery market.
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Author
Zara Fennell, Senior Analyst, Manufacturing Technology
