India’s domestic battery manufacturing capacity currently represents less than 1% of the country’s approximately 260 GWh demand pipeline from competitive tenders in 2026, highlighting continued reliance on imports despite increasing policy support for local battery production, according to new research from Wood Mackenzie.
The report, Chasing Self-Sufficiency: Cost of Building an Indigenous Battery Storage Supply Chain in India, estimates that more than 226 GWh of cell manufacturing capacity has been announced for construction through 2035. However, execution delays, financial viability concerns and dependence on Chinese and Korean technology licensors could leave India 10 to 15 years away from developing a globally competitive and self-sufficient cell manufacturing industry.
India had only 2 GWh of commissioned cell manufacturing capacity as of 2026, compared with China’s cumulative capacity of 2,695 GWh. China controls between 85% and 98% of global capacity across major battery supply chain components, including cathodes, anodes, separators and electrolytes.
Wood Mackenzie expects India to initially focus on localising downstream components such as containers, energy management systems, SCADA and battery packs over the next two to three years. A 20% domestic content requirement for grid-scale BESS projects under new tenders is expected to support this transition.
However, increasing domestic content requirements from below 20% to 100% could raise the total capital expenditure of a benchmark 100 MW, two-hour battery storage project by around 30%, according to Wood Mackenzie modelling.
Locally manufactured cells are also expected to remain 25% to 40% more expensive than imports, mainly due to limited manufacturing scale, higher financing costs and an underdeveloped supplier ecosystem. Despite this premium, 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.
India is expected to develop cell manufacturing using imported inputs over the next two to five years, while establishing domestic refining capabilities across the supply chain could take more than a decade.
Financial viability remains another key challenge. Only four players had commissioned gigafactories in India as of 2026, while several others remain in planning or early production. Wood Mackenzie estimates that a 5 GWh facility could operate at a negative 10% EBITDA, with breakeven requiring around 10 GWh of capacity and positive margins requiring at least 20 GWh.
Technology dependence is also expected to remain a constraint, with nearly all Indian manufacturers relying on Chinese or Korean technology licences. This limits their control over technology, pricing and supply chains.
“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 downstream components such as containers, EMS and battery packs offer near-term localisation opportunities, while building a self-sufficient cell industry will require sustained, targeted investment over a decade or more.
Priya Shrivastava, Senior Research Analyst at Wood Mackenzie, said India’s competitive cost position could benefit global battery supply chain diversification, but the country will need to accelerate execution to capture the opportunity before other emerging manufacturing hubs advance further.
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