Policies localizing electric vehicle and battery manufacturing in India

The report analyzes the role of Indian state governments in localizing the electric vehicle (EV) and battery value chain. While 14 states offer financial support to attract investment, localization remains low for high-cost components like batteries and motors. The study argues that while downstream assembly is maturing, state policies are still nascent regarding upstream and midstream segments, such as critical mineral sourcing and cathode active material production. It recommends a coordinated approach between central and state governments to de-risk investments, improve infrastructure, and bridge skill gaps.

• India's automotive sector is valued at nearly USD 240 billion, representing approximately 7.1% of the country's GDP and supporting more than 30 million direct and indirect jobs.
• Despite policies from both central and state governments, the net localization of high-cost EV components—including on-board chargers, DC-DC convertors, motors, and batteries—remains low in India.
• At least 14 state governments provide financial support via operating or capital expenditure-reducing measures to attract EV and battery manufacturing, though these investments have resulted in geographically dispersed outcomes.
• Current state policies show maturity in downstream segments like battery and vehicle assembly, but are underdeveloped for midstream (precursor and cathode active materials) and upstream (critical minerals mining and sourcing) segments.
• Localization requires a combination of central incentives for production and value addition, and state-level control over critical levers such as regulatory clearances, logistics infrastructure, power tariffs, and land acquisition.

APA

Dutta,, S. R. J. C. M. D. (2026). Policies localizing electric vehicle and battery manufacturing in India. International Institute for Sustainable Development. https://www.iisd.org/publications/report/policies-electric-vehicles-battery-manufacturing-india

Chicago

Dutta,, Swasti Raizada,Saumya Jain,Hrishabh Chandra,Tom Moerenhout,Manish Dua,Priyami. Policies localizing electric vehicle and battery manufacturing in India. International Institute for Sustainable Development, 2026. https://www.iisd.org/publications/report/policies-electric-vehicles-battery-manufacturing-india.

Wikipedia

{{cite report |last1=Dutta, |first1=Swasti Raizada,Saumya Jain,Hrishabh Chandra,Tom Moerenhout,Manish Dua,Priyami |title=Policies localizing electric vehicle and battery manufacturing in India |publisher=International Institute for Sustainable Development |date=22 April 2026 |url=https://www.iisd.org/publications/report/policies-electric-vehicles-battery-manufacturing-india |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{dutta2026policies, author = {Dutta,, Swasti Raizada,Saumya Jain,Hrishabh Chandra,Tom Moerenhout,Manish Dua,Priyami}, title = {{Policies localizing electric vehicle and battery manufacturing in India}}, institution = {International Institute for Sustainable Development}, year = {2026}, month = apr, url = {https://www.iisd.org/publications/report/policies-electric-vehicles-battery-manufacturing-india}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }