Noida, Aug 20 (APAC Media): India’s domestic battery manufacturing capacity accounts for less than 1% of an estimated 260 GWh demand pipeline from competitive tenders in 2026, leaving the country heavily reliant on imports even as policy support for energy storage gathers pace, according to new research by Wood Mackenzie.
The report, Chasing Self-Sufficiency: Cost of Building an Indigenous Battery Storage Supply Chain in India, says more than 226 GWh of cell manufacturing capacity has been announced for construction through 2035.
However, execution delays, weak project economics and continued reliance on Chinese and South Korean technology licensors mean India could remain 10 to 15 years away from developing a globally competitive and self-sufficient cell manufacturing industry.
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India had just 2 GWh of commissioned cell manufacturing capacity in 2026, compared with 2,695 GWh in China. China also controls between 85% and 98% of global capacity across key battery supply-chain segments, including cathodes, anodes, separators and electrolytes.
“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 the immediate opportunity was in downstream segments such as containers, energy management systems (EMS) and battery packs, where localisation was technically feasible and commercially attractive. Building a self-sufficient cell industry, however, would require sustained investment over a decade or more, she added.
Downstream localisation to lead
India is expected to focus on localising downstream components, including containers, EMS, SCADA systems and battery packs, over the next two to three years.
The push is being supported by a 20% domestic content requirement for grid-scale battery energy storage system (BESS) projects under new tenders. Wood Mackenzie estimates that increasing domestic content requirements from below 20% to 100% would add about 30% to the total capital expenditure of a benchmark 100 MW, two-hour BESS project.
Local cells remain more expensive.
Locally manufactured cells are expected to cost 25% to 40% more than imported alternatives, mainly because of limited production scale, higher financing costs and an underdeveloped supplier ecosystem, according to the report.
Despite these challenges, India has a competitive underlying cost position. Wood Mackenzie estimates that India has a 154% cost advantage over Japan and a 9% advantage over South Korea, making it the second-most competitive major manufacturing destination after China.
Cell production is expected to develop initially using imported inputs over the next two to five years, while establishing domestic refining capabilities could take more than a decade.
Gigafactories face profitability hurdles.
Only four companies had commissioned gigafactories in India as of 2026, while several other projects remained at the planning or early-production stages.
Financial viability remains a major obstacle. Wood Mackenzie estimates that a 5 GWh facility operates at an EBITDA margin of around -10%, with breakeven reached at approximately 10 GWh. Positive margins would require production capacity of at least 20 GWh.
Most manufacturers also continue to depend on Chinese or South Korean technology licences, limiting their control over technology, pricing and parts of the supply chain.
“India’s cost position is genuinely competitive in a global context, and that matters as supply-chain diversification becomes a strategic imperative,” 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,” she said.
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Disclaimer: This article is for informational purposes only and is based on publicly available information. APAC Media is not responsible for investment decisions or losses. Please conduct your own research or consult a financial adviser before investing.
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