Chennai: Despite strong initial industry interest, India’s effort to build a domestic battery manufacturing ecosystem under the Advanced Chemistry Cell Production Linked Incentive (ACC PLI) scheme is yet to unlock the country’s battery manufacturing potential.Launched in October 2021 with an outlay of ₹181 billion ($2.08 billion), the scheme aimed to establish 50 GWh of advanced battery cell manufacturing capacity by 2025 and reduce India’s near-total dependence on imported lithium-ion cells. However, as of October 2025, only 1.4 GWh — or 2.8% of the targeted capacity — has been commissioned within the stipulated timeline, entirely by Ola Electric, according to findings by JMK Research and the Institute for Energy Economics and Financial Analysis (IEEFA).Of the 40 GWh capacity allocated so far, Reliance New Energy is the only beneficiary that has indicated it will commission its second-round allocation of 10 GWh on time. Ola Electric, which received 20 GWh under the first auction, plans to commission 5 GWh by March 2026. However, the company has scaled back its expansion plans and does not expect to ramp up capacity beyond 5 GWh until FY2029, significantly diluting the commitments envisaged under the scheme.The report highlights a wide gap between intended and realised outcomes. Against an estimated target of 1.03 million jobs, the scheme has generated just 1,118 jobs so far — around 0.12% of the goal. Investment commitments also remain muted, with ₹28.7 billion committed to date, or about 26% of the targeted ₹112.5 billion.Beneficiaries have faced multiple implementation bottlenecks, including visa approval delays for Chinese technical specialists required for equipment installation, an aggressive two-year commissioning timeline, and stringent domestic value addition (DVA) requirements that have proven challenging for first-time battery manufacturers. These factors have contributed to delays, even as penalties of 0.1% of performance security per day apply for late commissioning.“Moreover, with India’s dependence on imported battery cells still close to 100%, the scheme’s original objectives remain largely unfulfilled,” said Prabhakar Sharma, senior consultant at JMK Research and a co-author of the report.While the initial auction in March 2022 allocated the full 50 GWh, the withdrawal of Hyundai Global Motors from its 20 GWh award necessitated a second round. The September 2024 auction saw bidders secure only 10 GWh, with the remaining capacity yet to be tendered. As of October 2025, no incentives have been disbursed against the targeted ₹29 billion.The report also points to gaps in the evaluation framework. Despite prior experience in battery manufacturing, Exide Industries and Amara Raja did not qualify, as scoring favoured higher domestic value addition, proposed capacity, and subsidy benchmarks — areas where new entrants outperformed incumbents.To unlock the scheme’s potential, the report calls for a multi-pronged approach, including a dedicated policy for critical minerals covering both sourcing and refining, a parallel scheme for cell components, and supportive tariff measures such as basic customs duty and anti-dumping safeguards. Strengthening testing and certification infrastructure, scaling equipment manufacturing and recycling, and building a skilled domestic workforce are also seen as critical.“It is equally important to assess how India can attract global battery players to establish manufacturing facilities in the country. The government designed the scheme to encourage both domestic and international participation, and bringing established global players into the ecosystem would strengthen capabilities, accelerate technology transfer, and help steer the industry in the right direction,” said Vibhuti Garg, Director – South Asia, IEEFA.
