As India advances toward its vision of Viksit Bharat, achieving a clean energy future will be crucial. The rising demand for advanced batteries is fueled by the growth of electric vehicles (EVs), consumer electronics, and stationary energy storage needs. With India’s battery storage demand expected to grow from 34 GW in 2023 to 450 GW by 2030, the focus now shifts to the country’s manufacturing capabilities. As India emerges in the global energy transition, addressing gaps, and seizing opportunities will be key to a self-reliant battery ecosystem.

In light of this, the 2025 Union Budget removed Basic Customs Duty (BCD) on 28 capital goods used in mobile battery manufacturing, encouraging local output for consumer electronics. As part of a broader strategy since the July 2024 Budget, India had already nullified BCD on 25 critical minerals. The 2025 Union Budget’s exemptions on cobalt powder, LiB scrap, lead, zinc, and 12 other critical minerals aim to strengthen sourcing of affordable critical mineral feedstock at competitive price, strengthen domestic battery production, and cut import dependence. 

Removing BCD on critical minerals lowers costs, attracts investment in refining and recycling, and strengthens India’s battery supply chain for global competitiveness. However, this is a long-term journey, requiring approximately five to six years to rapidly scale up domestic production, enhance recycling capacities and strengthen R&D investments. This effort is key to cutting imports and building a resilient circular economy. 

India’s battery manufacturing sector is still in its nascent stage. LiBs, essential for powering consumer electronics, have become the dominant technology due to their high energy density and longer lifespan. India’s rising LiB demand highlights its import dependence due to limited local manufacturing. Without strong policy support and industrial growth, reliance on countries like China, South Korea, and Japan may threaten long-term energy security and economic resilience.

Currently, China dominates the global LiB market manufacturing, accounting for 77% of worldwide cell capacity and 80% of raw material refining. To counter China’s dominance and boost local capacity, India has launched initiatives like Make in India for self-reliant manufacturing, the National Critical Mineral Mission (NCMM) for critical mineral supply, and a PLI Scheme for Critical Minerals to promote recycling and advanced technologies—together strengthening domestic industry and accelerating manufacturing. 

Despite efforts to boost domestic manufacturing, securing raw material supply chains remains urgent. Under NCMM, India may form strategic partnerships with friendly nations like Australia and Chile having the largest lithium reserves to bridge the raw material gap. 

India and Australia have already committed $43.2 million for joint initiatives between Commonwealth Scientific & Industrial Research Organization (CSIRO) and Indian partners, fostering collaboration in critical minerals research and technology development. India and Chile share a long-standing trade relationship, formalized by a 2005 Framework Agreement and a Preferential Trade Agreement to boost bilateral trade, including minerals and energy. These partnerships can help secure lithium supply and support India’s battery manufacturing. However, India must also invest in refining and processing to cut import dependence. 

Another key hurdle to India’s LiB growth is low R&D investment. India’s Gross Expenditure on R&D (GERD) across sectors stands at just 0.64% of GDP, significantly lower than China (2.4%) and the US (3.4%). With low overall GERD, battery R&D investment remains limited, hindering innovation. To compete globally, India must strengthen multi-institutional R&D collaborations. The ministry of electronics and IT had taken an initiative to establish a Centre of Excellence on Rechargeable Battery Technology at Centre for Materials for Electronics Technology, Pune to support SMEs the R&D needs on material, machine and process of advanced chemistry cell including cathode and anode materials of various rechargeable batteries like Li-ion, sodium ion, solid state Li-ion and flexible batteries. Scaling more public-private partnerships can boost local IP and aid industry. India should explore alternative chemistries like sodium-ion, sodium-sulphur, metal-air, redox flow, and lithium-metal—to reduce reliance on vulnerable critical mineral supply chains.

Efforts may be focused on building a strong recycling framework and boosting R&D via support labs and start-up incubators can help lower costs and reduce import dependence. However, globally, the present recycling rate of Ni, Co and Li are merely 60%, 32%, and 0.5% respectively, which is due to challenging reverse logistics of collecting end-of-life batteries and lack of profitable recycling technologies with limited volume. Recycling and refining industries must adopt innovative technologies to make metal extraction more profitable. 

At the same time, the emphasis on using domestically recycled materials under the Battery Waste Management Rules,2022(BWMR) though challenging, offers a chance to boost India’s self-sufficiency in critical materials. The regulation allows the targets to be met using any battery component, including non-critical materials like aluminum and plastics, rather than focusing on reclaiming lithium, cobalt, or nickel. Given the complexities, realistic timelines are key to avoid supply chain disruptions. While South Korea took over two decades to set recycled content guidelines after starting LiB production, India is aiming to introduce such regulations within just three years of commercial-scale manufacturing—highlighting the need for a more pragmatic timeline. India’s recycling infrastructure is underdeveloped, with most end-of-life LiBs poorly processed in the informal sector, causing major material losses. The current pace of progress is insufficient, making it imperative to accelerate domestic LiB manufacturing and recycling capacities in the next five to six years to meet BWMR guidelines and reduce dependency on external supply chains.

Battery recycling can reduce India’s reliance on raw material imports by recovering lithium, cobalt, and nickel from end-of-life LiBs for reuse in battery production. Unlike China, which is currently the only market with significant LiB recycling infrastructure, India’s ecosystem is deterred by limited investment and unorganised battery waste management. 

As India moves towards becoming a global leader in consumer electronics, ensuring a stable and sustainable supply of LiBs will be critical. Creating reserves of recycled critical minerals under NCMM, can help achieve true Atmanirbharta. India is at a crucial juncture in its journey toward self-sufficiency in LiB manufacturing, a sector vital for clean energy, digital growth, and industrial expansion. While schemes like PLI, customs duty cuts, and NCMM offer policy momentum, building a resilient battery ecosystem needs scaled-up production, secure supply chains, and stronger R&D. Addressing raw material gaps through global tie-ups, enhancing refining & processing capacities, and advanced battery recycling can cut import dependence. Multi-institutional R&D, alternative chemistries, and phased recycling mandates will enable a circular economy. Well-structured regulations, industry-government collaboration, and smooth execution, India can shift from assembly to value addition and emerge as a global leader in sustainable battery manufacturing.

This article is authored by Shiksha Dahiya, senior manager public policy, Chase Advisors and Sandeep Chatterjee, former senior director, ministry of electronics and information technology.