India EV Battery Localisation May Advance in Three Years

India could achieve substantial localisation of electric vehicle battery cells and their underlying components over the next two to three years, with domestic cell manufacturing expected to commence within a year. Tata Motors Passenger Vehicles Managing Director and CEO Shailesh Chandra shared this outlook while speaking at Autocar Professional's India EV Conclave 2026. During a panel discussion on scaling India's electric vehicle market, he explained that the country's EV supply chain was progressively becoming more localised, although battery cells and certain electronic components continued to depend on imports.

Chandra noted that several components used in battery packs, including cooling plates and busbars, were already being manufactured domestically. However, battery cells, which store the energy required to power electric vehicles, remained a significant area of import dependence. He said domestic cell manufacturing was expected to begin within a year, adding that the broader localisation of battery cells would take approximately two to three years. This transition would also involve developing domestic manufacturing capabilities for cathodes, anodes and the active materials used in these components.

The expected progress represents an important step in India's efforts to move beyond assembling battery packs with imported cells towards establishing a more comprehensive domestic battery manufacturing ecosystem. Although battery pack assembly is increasingly taking place within the country, manufacturing battery cells and their underlying materials requires more sophisticated industrial capabilities and substantial investment. Developing these capabilities would help expand the domestic supply chain beyond the components that are already being manufactured locally.

The Tata Group is among the companies investing in domestic battery cell manufacturing through its battery business, Agratas. The company is developing a battery cell manufacturing facility at Sanand in India's Gujarat state, with an initial planned annual production capacity of 20 GWh. The facility is expected to begin operations in 2027. In September 2026, Agratas announced the arrival of its first process equipment at the site, marking a transition from construction towards manufacturing readiness. Equipment installation, commissioning and operational preparations are expected to form the next phase of the project.

India's localisation ambitions are also supported by government incentives for domestic battery manufacturing. Under the Production Linked Incentive scheme for Advanced Chemistry Cell battery storage, the government has allocated Rs 18,100 crore to encourage the development of 50 GWh of domestic manufacturing capacity. Of this targeted capacity, 40 GWh has been awarded to four companies, including Ola Cell Technologies, Reliance New Energy Battery Storage and ACC Energy Storage. However, as of March 2026, only 1 GWh of installed capacity had been reported under the scheme, entirely attributable to Ola Cell Technologies. The ministry acknowledged that domestic battery demand continued to be met largely through imports.

Chandra said India's efforts to strengthen domestic manufacturing would need to account for China's established advantages in production scale and vertical integration. China has developed an extensive battery supply chain spanning raw materials, cells, components and finished vehicles, providing its manufacturers with a strong competitive position. However, he believes India could improve its competitiveness by leveraging relatively lower electricity and labour costs as domestic manufacturing capacity and supplier capabilities expand. Building a more comprehensive local ecosystem would be important to narrowing the existing manufacturing gap.

Power electronics represent another important area in which India has made progress, although deeper localisation remains a challenge. Chandra highlighted domestic manufacturing capabilities in components such as printed circuit boards (PCBs), while cautioning that local assembly or manufacturing does not necessarily mean an entire component has been localised. He pointed out that underlying elements, including semiconductors and resistors used in PCBs, were still being imported. This distinction highlights the need to assess localisation across the complete component supply chain rather than only at the final assembly or manufacturing stage.

Import dependence also extends further upstream into the battery supply chain, particularly for lithium and other critical minerals. Chandra said India would need to draw lessons from countries such as the United States and Japan, which are pursuing strategies to secure critical raw material supplies through overseas investments and acquisitions. Establishing reliable access to these resources would remain necessary alongside investments in domestic battery cells, materials and components. He argued that strengthening raw material security and developing local manufacturing capabilities would need to progress together.

Industry Impact & Outlook

India's ability to localise battery cells, active materials and electronic components will be an important factor in determining the depth and competitiveness of its electric vehicle manufacturing ecosystem. The planned expansion of domestic cell production, supported by investments such as Agratas' Sanand facility and the ACC battery PLI scheme, represents progress towards reducing dependence on imported battery products. However, the reported gap between the government's targeted and installed manufacturing capacity highlights the scale of the remaining challenge. Greater localisation will require capabilities extending beyond battery pack assembly to semiconductors, critical minerals and underlying materials. According to Chandra, India's electricity and labour cost advantages could strengthen its competitive position as these domestic capabilities develop over the next two to three years.

Frequently Asked Questions

1. When is India expected to begin manufacturing electric vehicle battery cells domestically?
India is expected to begin domestic electric vehicle battery cell manufacturing within a year, according to Tata Motors Passenger Vehicles Managing Director and CEO Shailesh Chandra. Speaking at Autocar Professional's India EV Conclave 2026, he said substantial localisation of battery cells and their underlying components could be achieved over the following two to three years. This development is intended to move the country beyond assembling battery packs using imported cells. The broader manufacturing ecosystem is also expected to include cathodes, anodes and their active materials.

2. Which battery components are already being manufactured in India?
Several electric vehicle battery pack components, including cooling plates and busbars, are already being manufactured domestically, according to Shailesh Chandra. However, battery cells remain a major area of import dependence. India also needs to develop manufacturing capabilities for cathodes, anodes and their underlying active materials. The distinction is important because domestic battery pack assembly does not necessarily indicate that the complete battery supply chain has been localised. Developing domestic production capabilities across these different stages will be necessary to establish a more comprehensive battery manufacturing ecosystem.

3. What is the planned capacity of Agratas' Sanand battery manufacturing facility?
Agratas is developing a battery cell manufacturing facility at Sanand in Gujarat with an initial planned annual production capacity of 20 GWh. The facility is expected to begin operations in 2027 as part of the Tata Group's investment in domestic battery manufacturing. In September 2026, the company announced the arrival of its first process equipment at the site, marking progress towards manufacturing readiness. Equipment installation, commissioning and preparations for operations were identified as the next phases of the project.

4. How much funding has India allocated for domestic battery manufacturing under the PLI scheme?
The Indian government has allocated Rs 18,100 crore under the Production Linked Incentive scheme for Advanced Chemistry Cell battery storage, targeting 50 GWh of domestic manufacturing capacity. Of this target, 40 GWh has been awarded to four companies, including Ola Cell Technologies, Reliance New Energy Battery Storage and ACC Energy Storage. However, reported installed capacity under the scheme stood at just 1 GWh as of March 2026, entirely attributable to Ola Cell Technologies. The ministry also acknowledged continued dependence on imported battery cells to meet domestic demand.

5. Why does India continue to depend on imported battery cells and electronic components?
India's battery manufacturing ecosystem is still developing capabilities across several important stages of the supply chain, particularly cell production and underlying material manufacturing. Although battery pack components such as cooling plates and busbars are manufactured domestically, cells, cathodes, anodes and active materials remain areas requiring further localisation. Dependence also extends to electronic components, including semiconductors and resistors used in printed circuit boards. Additionally, lithium and other critical minerals remain important upstream supply requirements. Chandra emphasised that domestic assembly alone should not be considered complete localisation.

6. How can India improve its competitiveness against China's EV battery manufacturing industry?
India could strengthen its competitiveness by leveraging relatively lower electricity and labour costs while expanding domestic battery manufacturing and supplier capabilities, according to Shailesh Chandra. China currently benefits from an extensive vertically integrated supply chain covering battery materials, cells, components and finished vehicles. India therefore needs to develop capabilities across multiple stages rather than concentrate only on battery pack assembly. Chandra also highlighted the importance of securing critical raw materials through strategies informed by countries such as the United States and Japan, including overseas investments and acquisitions.