Prime Minister Narendra Modi has called for a significant increase in battery production and storage capacity in response to the rapid growth of electric vehicles (EVs) in India. Speaking at the India Energy Storage Week event, he emphasized the importance of localizing battery production to meet the country’s growing demand for electric mobility.
India’s electric vehicle market is expanding, with two- and three-wheelers being the primary contributors to this shift. In 2024, the sales of electric cars grew by over 27%, reaching 1.95 million units. However, the majority of batteries used in Indian EVs are imported from countries like South Korea, Japan, and China.
The government is focusing on localizing the production of lithium-ion batteries, which could not only reduce India’s reliance on imports but also enhance the country’s capacity to support the electric vehicle sector. This move is expected to stimulate the domestic EV market significantly.
Despite this potential, India faces a major challenge in sourcing the raw materials necessary for lithium-ion batteries. The country lacks substantial deposits of essential minerals like lithium, cobalt, nickel, and graphite, forcing battery manufacturers to depend on imports from countries such as China and Hong Kong.
To address this issue, the Indian government has launched the National Key Minerals Mission with an investment of ₹34,300 crore over the first six years. This mission aims to increase exploration of key minerals and reduce reliance on imports, which is vital for the growth of India’s EV and battery industries.
Additionally, the Union Budget 2025 has provided a boost by exempting 35 new capital products used in battery production from Basic Customs Duty (BCD), as well as scrap lithium-ion batteries and crucial minerals like copper and cobalt, further supporting the local manufacturing push.
