India’s Advanced Battery Market is anticipated to climb from USD 4.1 billion in 2026 to USD 7.6 billion by 2031, registering 13.4% CAGR.
The advanced battery market in India is in a pivotal transitional phase, fundamentally driven by the national imperative for energy security and a decarbonized transportation sector. This market, which encompasses Li-ion, Lead-acid, and emerging chemistries, is shifting rapidly from traditional automotive and consumer electronics applications toward high-growth, high-capacity segments. Government-led policy interventions are explicitly reshaping industrial strategy, focusing on backward integration and indigenous cell manufacturing to mitigate global supply chain vulnerabilities and the substantial import bill associated with advanced battery components. The dual thrust of rapid electric vehicle adoption and the mandatory integration of energy storage with renewable energy projects establishes a concrete, quantifiable demand trajectory that is rapidly maturing the entire ecosystem, requiring a concurrent expansion of domestic manufacturing and a concerted effort to manage raw material dependency.
Growth Drivers
The Production Linked Incentive (PLI) Scheme is the most significant growth catalyst, directly propelling investment in large-scale battery cell manufacturing. This policy creates a localized supply mandate, thereby increasing the domestic demand for advanced battery production capacity. Concurrently, the electrification mandate in the automotive sector, driven by automakers like Tata Motors achieving early market dominance, directly converts vehicle sales into battery demand. Tata Motors' dominant share, which accounted for 42% of all battery electric vehicle (BEV) sales in the first quarter of 2025, translates immediately into volume orders for high-density battery packs. Finally, the Energy Storage Obligation (ESO) mandates specific percentages of renewable energy consumption to be paired with storage, creating a structural and guaranteed demand floor for utility-scale battery solutions. Each driver converts policy and commercial success into direct, measurable demand for advanced battery cells and packs.
Challenges and Opportunities
The primary challenge is the deep structural dependence on imports for critical raw materials such as lithium, cobalt, and nickel, and for advanced cell components, which exposes the market to geopolitical risks and commodity price volatility. This supply chain fragility acts as a cost headwind, dampening the affordability imperative for end-user segments like EVs. The market opportunity, however, resides in Second Life Battery (SLB) applications and recycling, which offers a pathway to resource efficiency and reduced environmental impact. Establishing clarity in regulations and developing a functional traceability system for used batteries can unlock the commercial viability of SLBs for residential backup systems and telecom towers, which will create a new, high-growth demand stream for repurposing services and prolonging the useful life of existing battery assets.
Raw Material and Pricing Analysis
The advanced battery market, particularly for Li-ion technology, is fundamentally constrained by the high import dependence of key raw materials. India imports nearly all necessary minerals, with a disproportionate reliance on a single region for supply. This external dependency introduces extreme volatility to battery pack pricing, as the cost of the final product is directly correlated with global commodity price fluctuations for materials like lithium and nickel. The lack of domestic processing and refining capabilities means that localization efforts face significant challenges beyond cell assembly. While global Li-ion battery prices have historically dropped due to economies of scale, the recent volatility and the absence of a localized mineral supply chain for India represent a major constraint on achieving consistent cost reduction and ensuring energy security.
Supply Chain Analysis
The global supply chain for advanced batteries is fundamentally Asia-centric, with China dominating both raw material processing and precursor/component manufacturing. India's supply chain is an extension of this global dependence, characterized by a lack of backward integration. Key dependencies involve cathode and anode active materials, as well as separators and electrolytes. Logistical complexities stem from the global sourcing of these critical components, requiring complex, risk-prone international transport, which inflates manufacturing costs and lead times for domestic cell assemblers. The Production Linked Incentive (PLI) scheme aims to shift this dependency by incentivizing local value addition in cell components, but substantial localization progress is still pending, highlighting a persistent gap between policy aspiration and on-ground production.
Government Regulations
Jurisdiction | Key Regulation / Agency | Market Impact Analysis |
Central Government | Production Linked Incentive (PLI) Scheme for ACC Battery Storage | Directly incentivizes and funds the establishment of large-scale domestic cell manufacturing (Gigafactories), creating a localized supply base. This policy is the single greatest structural driver for the demand for manufacturing capacity. |
Ministry of Power | Energy Storage Obligation (ESO) | Mandates a minimum percentage of renewable energy to be paired with energy storage, creating a guaranteed, predictable demand for utility-scale and grid-balancing advanced batteries. |
Ministry of Environment, Forest and Climate Change | Battery Waste Management Rules, 2022 | Establishes an Extended Producer Responsibility (EPR) framework for battery manufacturers and importers. This creates demand for recycling infrastructure and second-life battery ecosystem services, which are critical for circular economy value retention. |
By Technology: Lithium-ion Batteries (Li-ion)
The dominance of Lithium-ion batteries stems from a confluence of high energy density, declining costs, and technological maturity, making it the primary chemistry for high-growth applications like electric vehicles and grid-scale storage. The growth driver is fundamentally rooted in the performance imperative of the end-use application. In the automotive sector, high energy density translates directly into the non-negotiable consumer demand for increased vehicle range and reduced vehicle weight, which only Li-ion can reliably provide at scale. This performance feature makes Li-ion the default choice for BEVs, which are projected to constitute the majority of advanced battery demand. In energy storage, the necessity is driven by the round-trip efficiency and scalability required for utility-scale integration of intermittent renewable sources. The continuous, significant price drop observed since 2010—exceeding 90% in some estimates—is a powerful secondary driver, pushing Li-ion's cost-competitiveness to the point where it is now viable for stationary applications, a segment historically dominated by lead-acid batteries. However, the need for Li-ion specifically creates a simultaneous, inverse demand for a robust recycling infrastructure as end-of-life battery waste is projected to rise significantly, creating a new, specialized demand stream for resource recovery and second-life solutions.
By Application: Electric Vehicles (EVs)
The Electric Vehicle (EV) segment is the single most aggressive demand engine for the Indian advanced battery market, predominantly for high-capacity Li-ion solutions. The requirement is not generic but is specifically defined by the scale and velocity of adoption within the light-duty vehicle segment. The market, exemplified by the strong sales performance of domestic players, saw an EV sales share of 3% of all new light-duty vehicles (LDVs) in the first half of 2025. This sales volume translates directly to substantial order books for advanced battery packs, as each BEV requires a large-format, high-voltage battery system. The need for advanced batteries is further amplified by the specific nature of India's EV market, where Battery Electric Vehicles (BEVs) constitute nearly all EV sales, unlike other global markets where plug-in hybrid electric vehicles (PHEVs) hold a higher share. This BEV-centricity means a near-total dependency on high-energy-density batteries, maximizing the pull for Li-ion technology. The market's future demand is structurally tied to the automaker's dominance: an automaker's control of 42% of the BEV market translates into a direct, continuous bulk need for battery cells and packs to sustain production volumes. Furthermore, the long-term sustainability of this demand is intrinsically linked to the parallel development of local charging infrastructure—a key enabler that converts consumer interest into confirmed vehicle purchases, thus confirming the underlying battery demand.
The Indian advanced battery market presents a nuanced competitive landscape, where traditional domestic players in the lead-acid space intersect with major global Li-ion players and emerging local manufacturers spurred by the PLI scheme. The competition is segment-specific, with a significant shift in focus from established players towards the high-value, high-growth Li-ion cell manufacturing.
Exide Industries Ltd.
Exide Industries Ltd. is a dominant legacy player, traditionally known for its strong position in the lead-acid battery segment for automotive, industrial, and invertor applications. The company’s strategic positioning is now marked by a critical pivot toward Advanced Chemistry Cells (ACC), recognizing the irreversible market shift toward Li-ion technology. The company has secured incentives under the Production Linked Incentive (PLI) scheme, signaling its intent to transition from being primarily a battery assembler to a large-scale, indigenous Li-ion cell manufacturer. This move is a strategic imperative to protect its long-term relevance and capture the burgeoning demand from the Electric Vehicle and Energy Storage Systems segments.
Amara Raja Batteries Ltd.
Amara Raja Batteries Ltd. holds a robust market position, especially in the automotive aftermarket and industrial applications. Like its primary domestic competitor, Amara Raja is executing a strategic reorientation to capture the ACC opportunity, having been selected as a beneficiary under the PLI-ACC scheme. The company’s focus is on leveraging its established brand trust and distribution network while building new capabilities in Li-ion cell technology. A key aspect of its strategy involves its engagement with the circular economy for batteries, specifically in recycling, where the company is focused on realizing predictable economic returns from the regulated recycling of Li-ion batteries. This diversification into the end-of-life value chain positions it to capture value beyond primary manufacturing.
Contemporary Amperex Technology Co. Limited (CATL)
CATL, a global leader, represents the significant international competitive pressure. While their primary manufacturing is outside India, their influence is felt through supplying key global original equipment manufacturers (OEMs) and their technological leadership, particularly in advanced Li-ion chemistries. CATL's strategic positioning is characterized by unmatched economies of scale and a vast research and development (R&D) portfolio, setting the global benchmark for cost and performance. The company's presence in the Indian market, primarily through supply contracts with automotive and ESS players, challenges domestic manufacturers to rapidly scale production and innovation to remain competitive on both cost and technology fronts.
October 2025: Tamil Nadu Green Energy unveiled an ambitious plan to establish India's largest 2,500 MWh Battery Energy Storage System (BESS). This utility-scale project aims to strengthen the state grid by storing surplus solar and wind power, ensuring reliable, round-the-clock power availability for peak demand periods, and attracting private investment in storage technology.
September 2025: Ashok Leyland announced a major 5,000 crore investment over 7-10 years to build a domestic advanced battery ecosystem. The initiative includes a strategic, long-term partnership with China's CALB Group for technology transfer, localized manufacturing, and establishing a Global Centre of Excellence for research and development.
| Report Metric | Details |
|---|---|
| Total Market Size in 2026 | USD 4.1 billion |
| Total Market Size in 2031 | USD 7.6 billion |
| Forecast Unit | Billion |
| Growth Rate | 13.4% |
| Study Period | 2021 to 2031 |
| Historical Data | 2021 to 2024 |
| Base Year | 2025 |
| Forecast Period | 2026 – 2031 |
| Segmentation | Technology, Capacity, Material, Sales Channel |
| Companies |
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BY TECHNOLOGY
Lithium-ion Batteries
Lead-acid Batteries
Solid-state Batteries
Nickel-metal Hydride (NiMH) Batteries
Flow Batteries
Sodium-ion Batteries
Others
BY CAPACITY
Low Capacity (<50 Ah)
Medium Capacity (50-200 Ah)
High Capacity (>200 Ah)
BY MATERIAL
Cathode Material
Anode Material
Others
BY APPLICATION
Automotive
Electric Vehicles
Hybrid Electric Vehicles
Plug-in Hybrid Electric Vehicles
Energy Storage Systems
Residential
Commercial & Industrial
Utility-scale
Consumer Electronics
Industrial
Motive Power
Stationary
Medical
Aerospace & Defense
Others
BY SALES CHANNEL
OEM
Aftermarket