India’s Potential in the Midstream of Battery Production

The report examines India's strategic position in the electric vehicle (EV) battery supply chain, identifying opportunities in mineral processing and cell manufacturing. It analyzes key investment drivers—such as guaranteed demand, infrastructure, and policy incentives—and evaluates India's comparative advantages, including low labor costs and a strong chemical sector, against challenges like critical mineral dependency and the need for more upfront capital subsidies to attract multinational firms.

• India has set ambitious EV adoption targets for 2030, including 80% for two- and three-wheelers, 70% for commercial cars, 40% for buses, and 30% for private cars.
• The Production Linked Incentive (PLI) scheme for Advanced Chemistry Cells (PLI-ACC) has attracted approximately USD 8.3 billion in investments for 30 GWh of capacity, though this remains below the projected 2030 demand of 145–158 GWh.
• China maintains a dominant position across the global battery supply chain, processing over 50% of required minerals and controlling 75% of global battery cell capacity.
• India has a strong comparative advantage in LFP (lithium iron phosphate) battery chemistry because it produces 100% or more of its domestic iron ore demand.
• India can leverage its port infrastructure and free trade agreements, such as with Australia, to become a hub for mineral processing and export refined materials to the US, Europe, and Asia.
• A critical bottleneck for attracting investment in cathode and anode manufacturing is the lack of guaranteed demand or firm offtake agreements, which hinders access to private capital.
• India's low labor costs and established chemical sector make it a competitive location for mineral processing; infrastructure costs are estimated to be 70% lower than in other chemical processing countries.
• While India has significant natural graphite resources (8th largest globally), economic extraction remains largely unexplored, though the country has capacity for synthetic graphite production using coal tar.
• Multinational companies are less likely to participate in schemes like PLI-ACC because other jurisdictions offer higher levels of upfront capital subsidies rather than just production-linked incentives.
• The production of synthetic graphite for anodes is highly energy-intensive, and India's continued reliance on coal for over 70% of its electricity generation could conflict with the ESG requirements of global investors.

APA

Moerenhout, T., Goel, S., Bansal, A., Saxena, A., Brunelli, K., Jiang, C., Lee, L., Nilson, A., Wang, Q., & Xu, H. (2023). India’s Potential in the Midstream of Battery Production. International Institute for Sustainable Development. https://www.iisd.org/system/files/2023-09/india-potential-midstream-battery-production.pdf

Chicago

Moerenhout, Tom, Siddharth Goel, Abhishek Bansal, Arishna Saxena, Kevin Brunelli, Chengxi Jiang, Lilly Lee, et al. India’s Potential in the Midstream of Battery Production. International Institute for Sustainable Development, 2023. https://www.iisd.org/system/files/2023-09/india-potential-midstream-battery-production.pdf.

Wikipedia

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BibTeX

@techreport{moerenhout2023indias, author = {Moerenhout, Tom and Goel, Siddharth and Bansal, Abhishek and Saxena, Arishna and Brunelli, Kevin and Jiang, Chengxi and Lee, Lilly and Nilson, Anja and Wang, Qi and Xu, Huiying}, title = {{India’s Potential in the Midstream of Battery Production}}, institution = {International Institute for Sustainable Development}, year = {2023}, month = sep, url = {https://www.iisd.org/system/files/2023-09/india-potential-midstream-battery-production.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }