India’s battery manufacturing sector has a strong global cost position but remains structurally dependent on imports. The country must rapidly expand cell manufacturing capacity to meet rising demand, according to a Wood Mackenzie report released on Thursday.
The report said 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 major manufacturing destination after China.
However, Wood Mackenzie expects locally manufactured cells to cost 25–40 per cent more than imported cells in the near term. Limited production scale, higher financing costs and an underdeveloped supplier ecosystem are driving the cost gap.
“Cell manufacturing is expected to develop progressively with imported inputs over the next two to five years, while full refining capabilities will take more than ten years to establish,” the report said.
India currently produces less than 1 per cent of the approximately 260 GWh of cell demand projected from competitive tenders in 2026, the report added.
This supply shortfall continues to leave India dependent on imports even as the government accelerates its battery manufacturing ambitions.
Companies have announced more than 226 GWh of cell manufacturing capacity for construction through 2035. However, execution delays, financial viability challenges and continued dependence on Chinese and Korean technology licensors could keep India 10 to 15 years away from building a globally competitive and self-sufficient cell manufacturing industry.
India had only 2 GWh of commissioned cell manufacturing capacity as of 2026, compared with China’s cumulative capacity of 2,695 GWh.
China controls between 85 per cent and 98 per cent of global capacity across major battery supply chain components, including cathodes, anodes, separators and electrolytes. Wood Mackenzie said India must fundamentally restructure its manufacturing ecosystem to close this gap.
“India’s battery storage ambitions are credible, but the gap between policy intent and operational capacity is wide,” said Ankita Chauhan, director at Wood Mackenzie.
Chauhan added that India’s near-term opportunity lies in downstream components such as containers, EMS and battery packs, where localising production is both technically feasible and commercially attractive.