India has only a small amount of operating battery cell capacity compared with the demand expected from storage projects, according to Wood Mackenzie
Local production is likely to develop first around battery packs and other downstream components
More manufacturing capacity has been announced, but turning those plans into viable production remains a challenge
India is likely to remain 10 to 15 years away from a globally competitive and self-sufficient battery cell manufacturing industry, according to Wood Mackenzie. This is despite growing policy support and more than 226 GWh of announced manufacturing capacity.
The market research firm said India had only 2 GWh of commissioned cell manufacturing capacity in 2026, compared with an estimated 260 GWh demand pipeline from competitive tenders this year.
Domestic manufacturing therefore accounts for less than 1% of the projected demand. Wood Mackenzie said execution delays, financial viability challenges, and reliance on Chinese and South Korean technology licensors are slowing the development of a domestic battery supply chain.
“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. She said for India, near-term localization opportunities are more likely to emerge in downstream areas such as containers, energy management systems (EMS), and battery packs.
Indian battery cell manufacturing will develop initially using imported inputs over the next two to five years, but establishing domestic refining capabilities could take more than a decade and require sustained investment, says Wood Mackenzie in its analysis titled Chasing Self-Sufficiency: Cost of Building an Indigenous Battery Storage Supply Chain in India.
India is expected to focus on localizing downstream components over the next two to three years. This is supported by a 20% domestic content requirement (DCR) for grid-scale battery energy storage system (BESS) projects under new tenders. Increasing the DCR from below 20% to 100% could raise the total upfront cost of a standard 100 MW, 2-hour battery storage project by about 30%, according to the analysis.
Wood Mackenzie estimates that locally manufactured cells will cost 25% to 40% more than imported cells because of limited scale, higher financing costs, and an underdeveloped supplier ecosystem.
For India, financial viability is another challenge even with the presence of ‘gigafactories’. The research firm estimates that a 5 GWh battery cell facility in India operates at an EBITDA margin of about -10%, with breakeven at around 10 GWh. Achieving positive margins would require production capacity of at least 20 GWh.
At the same time, India has a competitive manufacturing cost position. It has a 154% cost advantage over Japan and a 9% advantage over South Korea, placing it second only to China among major manufacturing destinations, according to the research.
China remains dominant across the battery supply chain with its 2,695 GWh cumulative capacity, controlling between 85% and 98% of global capacity across major components, including cathodes, anodes, separators, and electrolytes.
“India’s cost position is genuinely competitive in a global context,” said Priya Shrivastava, senior research analyst at Wood Mackenzie. “The challenge is closing the execution gap fast enough to capture that opportunity before other emerging manufacturing hubs do.”
