From Cell to Pack: Building India’s Next-Generation Battery Ecosystem

by Dwarakanadha Reddy, Business Head of Amara Raja Advanced Cell Technologies (ARACT)

India is moving towards a battery-intensive economy, driven by electric vehicles and renewable energy storage. But with much of its cell supply still imported, the country faces a larger industrial challenge: building the technology, scale and capabilities to manufacture cells domestically

For much of the last decade, India’s battery conversation was centred on one question: how quickly can we electrify?

That question is no longer sufficient.

India has made real progress on adoption. Electric two-wheelers now sell close to two lakh units a month. Demand for advanced chemistry cells is expected to cross 125 – 150 GWh by FY2031 as electric mobility and energy storage scale. On the grid, battery energy storage is moving towards significant growth, with the Central Electricity Authority projecting a requirement of 236 GWh of BESS by 2031–32, from around 1 GWh of installed capacity in FY2025–26.

The harder question is where those batteries will come from.

Can India make the cells inside them, rather than simply assemble the packs around them? Can it do so at a cost the market will accept? Can it secure the materials that go into them? And can it build that capability before demand outruns it?

These questions point to what may become the defining challenge of India’s battery transition: the bottleneck is no longer the pack. It is the cell.

India Has Built the Pack, Not the Cell

India has built around 60 GWh of capacity to assemble battery packs. Yet by the end of 2025, it produced only about 1 GWh of cells. Around three-quarters of the lithium-ion batteries used in Indian electric vehicles come from China, and the import bill has risen from about USD 384 million in FY2019 to more than USD 3 billion in FY2025.

That gap tells us something important. India’s battery industry has been built from the outside in. The pack, the enclosure and the integration are increasingly local. The cell, the most valuable and technically demanding part of the chain, is not.

On paper, the gap is closing. More than 150 GWh of lithium-ion cell manufacturing capacity has been announced for commissioning by 2030. The government has also said that at least 10 manufacturers have announced around 178 GWh of cumulative capacity over the next five years. The two figures reflect different tracking bases and timelines, but both point to significant industry interest.

In practice, only around 2 GWh had been commissioned by 2026. Under the ACC PLI programme, 40 GWh has been awarded to four companies, but only 1 GWh had been installed by the end of 2025 and no beneficiary had yet claimed an incentive.

Capacity announced, therefore, is not the same as capacity delivered.

Dependence Is No Longer a Theoretical Risk

For years, reliance on imported cells was treated as a cost question. It is now a strategic one.

In October 2025, China introduced export licensing requirements covering high-energy lithium-ion batteries with a gravimetric energy density of at least 300 Wh/kg, LFP cathode materials with a compacted density of at least 2.5 g/cm³ and specified capacity thresholds, artificial graphite anode materials, and the equipment and technologies used to manufacture batteries and these materials. The measures came into effect in November 2025.

The significance goes beyond any individual product category. It demonstrates how quickly supply-chain dependencies can become strategic vulnerabilities.

The risk runs deeper than the cell. China dominates the processing and manufacturing of several critical battery materials and remains particularly dominant in the LFP value chain. A country that electrifies its transport and its grid on imported cells has not escaped energy dependence. It has simply changed its form.

Parity Is the Wrong Goal

The instinctive response is to try to match China on cost. That is the wrong race.

Locally made cells are expected to cost more than imports in the near term, because of limited scale, higher financing costs and a young supplier base. India is not alone in facing this challenge. Building a competitive cell ecosystem requires capital, process know-how, supplier development and, most importantly, time.

Scale will narrow the gap. Plants below roughly 10 GWh struggle to compete. But even at scale, parity with China is not guaranteed.

The real question, therefore, is not whether India can undercut China. It is whether India can justify a premium through supply-chain resilience.

India has been here before. Localisation in strategic manufacturing sectors can carry an initial cost premium without derailing long-term market growth. The objective is not protection for its own sake. It is to create enough domestic capability that a disruption somewhere else does not become a disruption here.

So, What Should India Do Differently?

The answer requires a shift in how India thinks about battery manufacturing: from announcement to validation, from cost parity to resilience, and from the pack to the cell.

First, validate before scaling

Cell manufacturing punishes those who scale before they learn.

Customer qualification lines, the step between the laboratory and the gigafactory, are deliberately different from mass-production facilities. Their job is to cycle through chemistries, formats and customer specifications, not to maximise output.

Two-wheeler makers may prefer cylindrical cells, while cars and grid storage have increasingly moved towards prismatic formats. The market itself keeps shifting. Two years ago, startups were expected to dominate electric two-wheelers. Today, the four largest makers, three of them incumbents, account for roughly three-quarters of sales.

Validation keeps options open until customer nominations are real.

The lesson is simple: build the capability to learn before building the capacity to produce at scale.

Second, Choose Chemistries for Resilience, Not Just Performance

Lithium is mined mainly in Australia, China and Chile. Indonesia dominates nickel supply, while the Democratic Republic of the Congo accounts for a significant share of mined cobalt.

LFP stands out for India. It is cobalt-free and draws on a more diversified mineral base, even though its cathode supply chain remains heavily concentrated in China.

Sodium-ion offers another route, reducing dependence on lithium and cobalt altogether.

The goal is not to control the entire upstream chain. That would neither be practical nor necessary.

The goal is to understand where vulnerability sits within each chemistry, diversify where it matters and build China-plus-one options for both materials and equipment.

Third, Design the Cell and the Pack as One System

A pack built around imported cells captures only part of the value and very little of the learning.

When cells are designed around how Indian vehicles and grids actually perform, field data from packs can flow straight back into cell design. That creates a feedback loop between the cell, the pack and the application that imported cells cannot provide.

Grid storage can also play an important role here. With renewable developers driving a growing pipeline of storage projects, stationary applications can provide early volume while vehicle programmes work through longer qualification cycles.

The opportunity is not simply to manufacture cells in India. It is to build an integrated learning system around them.

Fourth, Treat Talent as Strategic Infrastructure

India can borrow expertise from mature battery ecosystems to run its first lines. But the model must be a bootstrap one, with the large majority of operators, engineers and process specialists eventually trained locally.

Imported expertise can provide the template. Indian talent has to build the capability.

This is especially important because cell manufacturing is not simply a capital-intensive industry. It is a process-intensive one. Yield, consistency, quality control and continuous improvement are what ultimately determine whether a gigafactory becomes commercially viable.

Execution Will Decide the Outcome

Policy is already moving in this direction.

The ACC PLI scheme was designed to reward domestic manufacturing and value addition, with incentives linked to actual production rather than simply announced capacity. Yet the gap between awarded capacity and installed capacity shows the challenge clearly. As of December 2025, 40 GWh had been awarded under the scheme, but only 1 GWh had been installed by the four beneficiaries.

The system ultimately rewards execution, not announcements.

Success, in the end, comes down to two things: commercially competitive cells, and gigafactory-scale production with consistently high yields.

At Amara Raja, that is the path we have chosen.

Our 16 GWh gigafactory programme in Telangana is being built in deliberate phases rather than as a race to scale. Our Customer Qualification Plant is already running trials with customers across chemistries and formats, ahead of commercial production from our first 2 GWh line in 2027.

Alongside it, an energy storage facility and a high-voltage battery pack plant will carry those cells through to packs for vehicles and the grid.

We are not trying to be a cheaper China.

We are helping build a credible Indian alternative, from cell to pack.