To reduce import dependency, enhance energy security and meet decarbonisation goals, India must scale up its battery and electrolyser manufacturing capacity. Cost considerations further strengthen the case for localised production. Transportation costs, import duties and currency fluctuations substantially increase the price of imported systems. Domestic manufacturing can progressively drive down costs through economies of scale, process innovations and the development of India-specific solutions tailored to local conditions. A greater focus on the domestic manufacturing of energy storage technologies is essential, given the significant gaps in demand and supply, which have become a major concern due to the limited supply and concentration of critical minerals.
Recognising this, the Indian government has taken several policy initiatives to boost the domestic manufacturing of battery storage and electrolysers, as well as securing the supply of critical minerals. Industry stakeholders have supported the government’s indiginisation goals, with long-term investment plans and collaborations on the horizon. Renewable Watch provides an overview of the key trends in this space…
Battery manufacturing
India is undergoing a major shift in its energy and industrial landscape, with the rising demand for electric vehicles (EVs) and battery energy storage systems (BESSs) driving the need for domestic manufacturing. India’s BESS sector has seen strong momentum, marked by key policy interventions such as the Rs 181 billion production-linked incentive (PLI) scheme for advanced chemistry cell (ACC) battery storage launched in 2021. The scheme aims to establish 50 GWh of domestic manufacturing capacity. In the first round of bidding, 30 GWh was awarded to Reliance New Energy Limited, Ola Electric, and Rajesh Exports Limited.
In February 2025, the Ministry of Heavy Industries signed an agreement with Reliance New Energy Battery Storage Limited, awarding it 10 GWh of ACC capacity under the PLI scheme, following a competitive global tender. This makes Reliance eligible for incentives under the PLI ACC scheme. With this latest signing, a total of 40 GWh out of the targeted 50 GWh capacity has now been allocated to four companies. Moreover, the Indian government has substantially increased the budget allocation for ACC battery storage under the PLI scheme for 2025-26, rising sharply from the revised estimate of Rs 1.52 million in 2024-25 to Rs 15.57 million. This is a strong push to accelerate domestic battery manufacturing and reduce the reliance on imports.
Beyond the PLI scheme, several private players have also stepped up to establish battery manufacturing capacities, with a wave of new investment plans recently announced, particularly for lithium-ion (Li-ion) technology. In the past year, the sector has witnessed significant developments, with both large-scale public and private companies, as well as start-ups, making substantial investments in this space.
Several strategic partnerships have emerged, such as Hindustan Zinc Limited signing an MoU with AEsir Tech to develop a new battery manufacturing facility in India. The JSW Group also revealed plans for a 50 GWh facility in Odisha, set to be completed between 2028 and 2030. Further, the Tata Group committed $1.57 billion to set up a gigafactory in Gujarat, aiming to produce 20 GWh of Li-ion cells annually.
Other domestic giants are also strengthening their presence in the BESS space. Waaree Energies Limited launched a 3.5 GWh ACC plant through its subsidiary, backed by a capex of Rs 20.73 billion and an investment of Rs 6.5 billion funded via a mix of debt and internal resources. Similarly, Exide Industries Limited infused Rs 1,499.9 million into its lithium battery arm, Exide Energy Solutions Limited, through a rights-based equity subscription to bolster capacity and innovation.
In the emerging technology space, Vikram Solar Limited unveiled plans for a fully integrated solid-state battery manufacturing facility with an initial capacity of 1 GWh, scalable to 5 GWh. These batteries, designed for higher energy storage and improved safety, will be built primarily with domestically sourced components.
In the start-up space, lithium battery start-up Pointo secured Rs 62 million in seed funding, of which Rs 50 million came from lead investor Equirus InnovateX Fund to develop a complete lithium battery ecosystem encompassing manufacturing, financing and servicing.
Meanwhile, Lohum expanded its focus to upstream capabilities by establishing a battery-grade lithium refinery with 1,000 metric tonnes of annual capacity. The company also commenced production of key value-added materials such as cathode active materials, which are critical for Li-ion battery production.
Electrolyser manufacturing
India’s green hydrogen sector is gaining strong momentum, driven by the National Green Hydrogen Mission and the Strategic Interventions for Green Hydrogen Transition (SIGHT) programme. These initiatives aim to build a self-reliant ecosystem that encourages domestic manufacturing, with a key focus on electrolysers. With global demand for green hydrogen surging, this presents an opportunity for Indian manufacturers to scale up and establish a global presence. Recognising the importance of this sector, the government is actively taking steps to promote indigenous manufacturing capabilities, specifically through Component I of the SIGHT scheme, which focuses on domestic electrolyser manufacturing.
Under the SIGHT scheme, the Solar Energy Corporation of India (SECI) issued a tender in July 2023 for 1,500 MW of electrolyser manufacturing capacity, divided into two buckets: 1,200 MW under Bucket 1 (any stack technology) and 300 MW under Bucket 2 (indigenously developed stack technology). The tender was oversubscribed in December 2023, with 21 companies proposing 3.4 GW of annual capacity. In January 2024, the entire 1,500 MW was awarded to eight bidders. Under Bucket 1, Reliance Electrolyser Manufacturing, John Cockerill Greenko Hydrogen Solutions, and Jindal (India) Limited each secured 300 MW with maximum incentives of Rs 4.44 billion. Meanwhile, Ohmium Operations Private Limited, Advait Infratech Transitions Limited and L&T Electrolysers Limited won 137 MW, 100 MW and 63 MW respectively, with incentives of Rs 2.03 billion, Rs 1.48 billion and Rs 0.93 billion. Under Bucket 2, homiHydrogen and Adani New Industries Limited won 101.5 MW and 198.5 MW, with incentives of Rs 1.5 billion and Rs 2.94 billion respectively.
Later, in March 2024, as part of Component I of the SIGHT scheme, Tranche II of the Incentive Scheme for Electrolyser Manufacturing was announced, and SECI called for bids during the same month. It includes Bucket 1 (based on any stack technology) with a capacity of 1,100 MW, Bucket 2A (based on indigenously developed stack technology) with a capacity of 300 MW and Bucket 2B (based on indigenously developed stack technology with smaller units) with a capacity of 100 MW. The tender was oversubscribed, with 23 companies proposing 2,847 MW of annual capacity. Finally, in September 2024, 13 companies were selected across the three buckets. In Bucket 1, Waaree Energies, Matrix Gas and Renewables Limited, Advait Infratech, Ohmium Operations, GH2 Solar Private Limited, Newage Green Electro Private Limited and Avaada Electrolyser secured 300 MW, 237 MW, 200 MW, 137 MW, 105 MW, 71.5 MW and 49.5 MW respectively. Under Bucket 2A, Adani Enterprises Limited won 71.5 MW and Newage Green Electro won 228.5 MW. For Bucket 2B, Adani Enterprises, Eastern Electrolyser Limited and Newtrace Private Limited each received 30 MW, while Suryaashish KA1 Solar Park Private Limited was awarded 10 MW.
Alongside government efforts, the sector has also seen a steady rise in participation from private players, with several announcing plans in the electrolyser manufacturing space in the past year. Larsen & Toubro (L&T) launched its first indigenous electrolyser at its Gujarat facility, and partnered with McPhy Energy to set up a GW-scale manufacturing plant. Adding to this momentum, Ohmium inaugurated a GW-scale proton exchange membrane (PEM) electrolyser factory in Doddaballapura, Karnataka, while Advait Infratech announced plans to scale up capacity in Gujarat to 200 MW by 2025, targeting mid-sized industrial demand. Meanwhile, Oriana Power Limited joined the sector with plans for a GW-scale facility to manufacture alkaline electrolysers and balance of plant modules, aiming for integrated project delivery.
Scaling up deployment, Jakson Green, through its Greater Noida plant, delivered its first 3.8 MW batch of electrolysers for urban hydrogen refuelling stations. At the utility scale, John Cockerill secured a 1.3 GW electrolyser order from AM Green for a green ammonia project. Meanwhile, the Waaree Group began building a 300 MW alkaline electrolyser facility in Gujarat, and BGR Tech Limited partnered with South Korea’s Elchemtech to introduce PEM technology to the Indian market.
Challenges and the way forward
Despite strong policy support and growing private sector participation, India’s battery and electrolyser manufacturing space continues to face several challenges. The supply-demand gap, particularly in the Li-ion battery manufacturing space, is a key issue. According to S&P Global Mobility, the country had a capacity of 18 GWh in 2023, which is expected to rise to 145 GWh by 2030. However, domestic production is projected to meet only 13 per cent of the total demand, with the bulk still dependent on imports. The sector also faces major challenges, including he reliance on imported minerals such as lithium and cobalt, limited battery recycling infrastructure, and dependence on foreign technology and manufacturing equipment. High financing costs compared to global counterparts further impact cost competitiveness.
The electrolyser market also faces the supply-demand gap issue. As per the International Energy Agency, the global announced electrolyser manufacturing capacity was 25.4 GW per year in 2023, with India’s share at 0.8 GW per year. By 2030, the projected announced manufacturing capacity will be to 168.7 GW per year, with India’s share at 12.7 GW per year. Despite this progress, the anticipated capacity still falls short of the electrolyser capacity needed (around 60-100 GW) to meet India’s ambitious green hydrogen targets by 2030. As a result, the country may continue to rely heavily on imports to bridge the gap between domestic demand and manufacturing capacity in the coming years.
However, India has significant scope for promoting the localisation of electrolyser components. The Council on Energy, Environment and Water’s report titled “How can Hydrogen Electrolysers be Made in India?” highlights that hydrogen electrolysers can be largely manufactured in the country by leveraging domestic capabilities, particularly in balance of plant (BoP) components, which make up 60 per cent of the total cost. For PEM electrolysers, about 72 per cent of components such as power electronics and storage tanks can be indigenised, while 10 per cent can be partially localised. Key inputs such as Nafion membranes and platinum group metals must still be imported. Solid oxide electrolysers, offer similar indigenisation potential, though materials such as zirconia, lanthanum strontium cobalt ferrite and nickel foam remain import-dependent. By building local supplier networks, securing long-term mineral imports, investing in research and development (R&D) for alternatives, and creating testing infrastructure, India can eventually capture 70-80 per cent of the electrolyser manufacturing value chain and reduce reliance on imports. Alkaline electrolysers can be largely manufactured in the country, with around 80 per cent of components – mainly BoP and key stack parts – already manufacturable domestically. Challenges remain in sourcing nickel foam and zirconia, which must be imported. Investing in R&D for material alternatives and recycling, along with scaling production, can help India build a competitive and cost-effective alkaline electrolyser manufacturing base.
Overall, both batteries and electrolysers use critical minerals with limited reserves, which are concentrated in a few locations, leading to supply chain risks. This presents a dual challenge for India – dependence on imports and the difficulty of developing and advancing up the value chain due to this concentration.
India is proactively working on solving this challenge, and one of the key highlights of this year’s union budget is the government’s push for securing critical minerals. To this end, the central government has committed Rs 343 billion over a period of seven years to boost mineral activities, followed by India’s identification of 30 critical minerals in 2023. The country has already opened up minerals such as lithium and titanium for commercial mining, and allowed 100 per cent foreign direct investment in exploration. The government has auctioned 24 strategic mineral blocks and launched the first-ever exploration license auction. In addition, customs duties on 25 minerals have been removed to boost domestic capabilities. Internationally, India is securing resources through Khanij Bidesh India Limited and forging global alliances to ensure long-term mineral security. Apart from these initiatives, Indian industry stakeholders are considering upcoming technologies such as sodium-ion batteries to reduce material dependency. In the green hydrogen space, players largely rely on alkaline technology, which uses fewer critical minerals compared to PEM.
Accelerating the indigenous development of batteries and electrolysers is key to making the energy transition more sustainable. India had somewhat missed the bus with the domestic manufacturing of solar components, but has since taken proactive measures to expand its manufacturing base. Going forward, the country should ensure the same opportunity is not missed for batteries and electrolysers.
