India Trails China In Battery Manufacturing Capacity

India's battery manufacturing sector is globally competitive in terms of costs, but it still relies heavily on imports, according to a report by Wood Mackenzie.

The report states that India offers a 154 per cent cost advantage over Japan and a 9 per cent advantage over South Korea, making it the second-most competitive destination for battery manufacturing after China.

However, the cost of locally manufactured cells is expected to be 25-40 per cent higher than imported ones in the near term due to limited scale, higher financing costs, and an underdeveloped supplier ecosystem.

The report forecasts that cell manufacturing will develop progressively over the next two to five years, with imported inputs, while full refining capabilities will take more than ten years to establish.

Currently, India's domestic cell manufacturing accounts for less than 1 per cent of its approximately 260 GWh demand pipeline from competitive tenders in 2026.

Despite having announced over 226 GWh of cell manufacturing capacity for construction through 2035, India remains 10 to 15 years away from having a globally competitive, self-sufficient cell industry due to execution delays, financial viability challenges, and deep technology dependence on Chinese and Korean licensors.

As of 2026, India has only 2 GWh of commissioned cell manufacturing capacity, compared to China's cumulative capacity of 2,695 GWh.

China controls between 85 per cent and 98 per cent of global capacity across every major supply chain component, from cathode to anode, separator, and electrolyte.

To bridge this gap, India needs to fundamentally restructure its manufacturing ecosystem, according to the report.

Ankita Chauhan, director at Wood Mackenzie, said, 'India's battery storage ambitions are credible, but the gap between policy intent and operational capacity is wide.'

Chauhan added that the near-term opportunity lies in downstream components such as containers, EMS, and battery packs, where localisation is both technically feasible and commercially attractive.

In conclusion, while India has made progress in battery manufacturing, it still has a long way to go to become self-sufficient and globally competitive.

The Indian government will need to implement policies to support the growth of the domestic battery manufacturing industry and reduce its dependence on imports.

This will require significant investment in research and development, as well as the creation of a supportive ecosystem for manufacturers.

Only then can India hope to bridge the gap with China and become a major player in the global battery manufacturing industry.