India needs 47.24 GW of battery storage by 2031-32 to support its clean energy shift. While India started a PLI scheme in 2021, only 1.4 GWh of capacity got commissioned by October 2025. Many battery cells still come from China, as India lacks enough local minerals and manufacturing technology.
India must act now on minerals, components, technology, finance, and skills for battery manufacturing
India's clean energy story has so far been told in terms of gigawatts of solar and wind capacity additions. The next chapter will be told in gigawatt-hours. The ability to store cheap power and release it when it is needed is becoming increasingly important for energy transition.
Battery Energy Storage Systems (BESSs) can help in this. The Central Electricity Authority estimates that India will need about 47.24 GW/236 GWh of BESSs by 2031-32, alongside 26.69 GW/175 GWh of pumped storage.
India had roughly 1 GWh of domestic cell-making capacity at the end of 2025, against about 60 GWh of pack assembly. We can assemble batteries, but cell manufacturing remains in its early stages. An IEEFA analysis puts it bluntly: nearly every battery cell powering India's shift is imported, mostly from China. The Production Linked Incentive (PLI) scheme for Advanced Chemistry Cells, launched in 2021 with a 50 GWh target by the end of 2025, was meant to change this. However, by October 2025, only 1.4 GWh, or 2.8 per cent of the target, had been commissioned.
The weak links
There are five areas where India faces important constraints.
The first is minerals. India has effectively no domestic lithium refining capacity, and 68 per cent of its lithium imports in 2025 came from China. The 5.9 million-tonne lithium resource identified in Jammu and Kashmir has yet to translate into an operating mine. It will take years and may be decades to operationalise it.
The second constraint is components. A battery cell is only as local as the materials that go into it. China controls about 99 per cent of graphite anode production and more than 80 per cent of cathode materials.
A high concentration of this important material makes it a geopolitical bargaining chip.
The third constraint is technology and manufacturing know-how. The first PLI winners were first-time cell manufacturers, and they have faced difficulties with equipment installation, domestic value-addition requirements and the availability of specialised technical personnel. This is not unusual for a new industry, but it means that India needs to shorten the learning curve.
The fourth constraint is finance. As the IEA has pointed out, higher financing costs have been one reason some planned storage projects in India have been delayed or abandoned. Aggressive bidding can make this problem worse because projects must remain financially viable over their entire operating life, not just win a tender.
And fifth, India needs more cell testing and certification facilities and a larger pool of trained manpower. Without these, even a well-funded factory can struggle to reach stable commercial production.
Strengthening BESS capacity
What India needs now is a shift from looking only at battery projects to building the ecosystem around them. The starting point should be the supply chain itself.
Cell factories require refined minerals and locally available components, so India needs greater capacity for lithium and graphite refining, as well as for cathodes, anodes, separators, and electrolytes. The experience of the solar industry is a useful reminder that assembling imported products is not the same as building an industry.
The PLI scheme also needs to be made more practical and focused on execution. A gradual domestic-value-addition path starting at 10-15 per cent and rising over seven to eight years. Linking incentives to realistic milestones and actual production can help ensure that announced capacity becomes working capacity.
India also needs to be pragmatic about technology. Joint ventures, licensing arrangements and technology partnerships with established global players can reduce the time needed to build manufacturing capability.
Demand can also be used to build supply. A predictable requirement for locally made cells or components can give manufacturers confidence to invest without creating a sudden cost shock for storage projects. Calibrated customs duties can support this transition.
India should also keep an eye on the next generation of battery technologies. Sodium-ion batteries are one example. A national effort focused on pilot plants, research, hard carbon from agricultural waste, and support for start-ups could help India participate earlier in the next stage of battery innovation.
Finally, storage projects should have easier access to green and climate finance. Also, investments in testing laboratories, recycling, safety, and skills need to move in step with manufacturing rather than be treated as an afterthought.
If India acts now on minerals, components, technology, finance, and skills for battery manufacturing, it will not only make the country's energy transition resilient but also create a massive export opportunity.
Labanya is a Senior Visiting Fellow at the London School of Economics and Political Science (LSE), and Aayush is an executive at BSNL