New Delhi [India], November 14 : India is making strides to reduce its dependence on imported lithium-ion (Li-ion) batteries, a report by CareEdge Ratings says it is expected to drop to about 20 per cent by FY27.
Currently, nearly all of India's 15 GWh demand for Li-ion batteries is met through imports. However, this demand is projected to soar to 54 GWh by FY27 and further to 127 GWh by FY30, driven by increased EV adoption and decarbonization of the energy grid.
The shift comes as the country accelerates its push toward renewable energy, aiming to meet 50 per cent of its energy needs from renewable sources by 2030.
This goal, along with growing demand for electric vehicles (EVs) and grid-level energy storage, is driving a rapid rise in demand for advanced batteries like Li-ion.
To support this transition, the Government of India has introduced measures such as the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme and Viability Gap Funding (VGF) for Battery Energy Storage Systems (BESS).
These policies aim to make EVs and energy storage systems more affordable, with an EV penetration target of 30 per cent by 2030, although CareEdge Ratings anticipates a more realistic penetration of 20 per cent, considering the current pace of EV adoption and infrastructure development.
The declining cost of Li-ion batteries, which has dropped from USD 780/kWh in 2013 to USD 139/kWh in 2023 due to technological advancements and economies of scale, is another factor fuelling this demand.
To meet it, India is building large-scale integrated Li-ion battery production facilities, supported by the Advanced Chemistry Cell (ACC) Production Linked Incentive (PLI) scheme.
The government has allocated 40 GWh in battery production capacity through this scheme, with an additional 10 GWh to be awarded soon. Many established battery manufacturers and new companies are also setting up facilities outside the PLI framework, with these capacities expected to come online gradually by FY27.