TL;DR
India is focusing on increasing domestic battery manufacturing to reduce its reliance on imported EV batteries, particularly from China, to ensure a resilient and sustainable EV supply chain.
India is intensifying its efforts to reduce dependence on imported batteries, primarily from China, to strengthen its electric vehicle (EV) supply chains. As EV sales surge—with approximately 2.5 million vehicles sold in FY26—the country is shifting its focus from relying on imported fossil fuels to establishing self-reliance in battery manufacturing. This strategic move aims to ensure supply chain resilience, strategic autonomy, and long-term sustainability for India's burgeoning EV sector.
Despite various government policies like purchase subsidies and tax exemptions successfully stimulating market demand for EVs, the core challenge remains the reliance on external battery sources. The Production Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC) manufacturing, approved in 2021 with a budgetary outlay of ₹18,100 crore, aims to create a competitive domestic ecosystem for 50 GWh of ACC batteries. However, only about 1 GWh of capacity has been installed so far, indicating a gap that needs to be addressed.
Currently, passenger EVs in India source batteries from 14 global manufacturers, with a significant portion imported from Chinese companies. This highlights a direct correlation between increased EV sales and higher imports from China. To counter this, India's updated EV Policy (2024) focuses on encouraging domestic production, reducing overall costs, and boosting employment by removing import duties on key battery components.
