Govt will support manufacturing of cell components in India: heavy industries minister Kumaraswamy

New Delhi: Union heavy industries minister H. D. Kumaraswamy said on Wednesday that the government will support the manufacturing of cell components in India, as localizing the full value chain is critical in the wake of global supply chain disruptions, according to a press statement.

"The government can provide policy direction and create an enabling framework, but the success of this mission will depend equally on active collaboration between industry, research organisations and other stakeholders. We must work collectively to build a complete domestic ACC ecosystem," Kumaraswamy said, addressing a consultation of cell component manufacturers and experts in New Delhi.

“India must develop capabilities across the entire battery value chain and emerge as a globally competitive manufacturing hub for advanced battery technologies," he said, adding that reducing imports and building a robust domestic value chain is a strategic imperative as India is at a crucial point in its energy transition, aiming to be a net-zero carbon emitter by 2070.

Import reliant

While India has rolled out schemes to support the manufacturing of advanced chemistry cells, the localisation for those is only about 20-25%, meaning about three-quarters of the value chain is still reliant on imports, Kumaraswamy said.

“Among the major concerns raised were high capital and operating expenditure, dependence on imported manufacturing equipment, high energy consumption, aggressive global market pricing, restrictions on technology access and prolonged qualification cycles of 12 to 18 months with battery cell manufacturers. Global supply chain vulnerabilities and export controls on critical battery technologies and components were also discussed in detail,” the press statement said.

India’s demand for cells is expected to rise to about 196 GWh by 2030 and about 236 GWh by 2032 owing to rising adoption of electric vehicles, grid-scale energy storage services, and data centres, the minister said.

Urgent need

Kumaraswamy noted that India's battery cell component industry urgently needs support due to massive supply gaps. For instance, the current domestic capacity for lithium iron phosphate (LFP)—a crucial cathode material valued for its safety and long lifespan—stands at just 5,775 tonnes per annum, compared to a projected requirement of 472,000 tonnes per annum by 2032. Similarly, domestic production of anodes and electrolytes falls drastically short of future demand, while local manufacturing of separators and copper foil is currently negligible.

The government support for cell components comes in the wake of India’s ₹18,100-crore incentive package for 50 GWh of cell manufacturing capacity. While three companies – Ola Electric, Rajesh Exports, and Reliance Industries – were selected to build battery capacity, no incentives under this scheme have yet been disbursed.

Mint reported earlier that the government was working on a scheme to support cell component manufacturing, with discussions over the last two months revolving around whether incentives should be given for capital expenditure or operational expenditure.