India introduced the Advanced Chemistry Cell Production Linked Incentive (ACC PLI) scheme in October 2021 with the goal of developing a strong domestic battery manufacturing industry and reducing the country’s dependence on imported lithium-ion cells, most of which come from China. The government earmarked INR181 billion (about USD2.08 billion) to support the creation of 50 gigawatt hours (GWh) of advanced battery cell manufacturing capacity by 2025. However, by October 2025, progress has been far slower than expected. Only 1.4 GWh, just 2.8% of the target has been commissioned, and all of this capacity belongs to Ola Electric, according to a new report by JMK Research and the Institute for Energy Economics and Financial Analysis (IEEFA).
The report, titled Assessing India’s incentive scheme to enhance the battery manufacturing ecosystem, reviews the scheme’s performance, the beneficiaries involved, and the obstacles slowing progress. It highlights the significant gap between what the scheme aimed to achieve and what has been implemented so far. For example, although the ACC PLI was expected to generate around 1.03 million jobs, only 1,118 jobs have been created to date, representing just 0.12% of the target. Investments have also lagged behind expectations. So far, companies have committed only INR28.7 billion (USD330 million), which is around one-fourth of the intended INR112.5 billion (USD1.29 billion).
Despite strong interest during the tendering process, many challenges emerged once implementation began. Hyundai Global Motors withdrew from its allocated 20 GWh capacity after the first auction in March 2022, forcing a second auction round. In the September 2024 auction, bidders secured only 10 GWh, leaving another 10 GWh to be tendered in the future. On-ground progress has been slow as well. No incentives from the planned INR29 billion (USD332 million) have been released so far. Reliance New Energy has stated that it will commission the 10 GWh capacity awarded in the second auction on time, but its 5 GWh allocation from the first round is delayed. Ola Electric has also scaled back its initial plans and now expects to install just 5 GWh of its planned 20 GWh by FY2029.
Another key issue highlighted in the report is the scheme’s evaluation framework. Only Exide Industries and Amara Raja—companies with actual battery manufacturing experience—participated in the auctions, but neither qualified. Instead, new entrants scored higher due to criteria that prioritised domestic value addition, proposed capacity, and subsidy benchmarks, even though they lacked prior expertise.
According to Prabhakar Sharma of JMK Research, strong policy support created interest and investment announcements, but real progress on the ground has been limited. India still relies almost entirely on imported battery cells, meaning the scheme’s central objective remains unmet. To encourage timely commissioning, the government has imposed penalties on beneficiaries for delays.
The report suggests that improving the ACC PLI scheme will require a broader strategy. This includes building reliable battery testing and certification facilities, scaling up equipment manufacturing and recycling capacities, and developing a skilled domestic workforce. Co-author Saif Jahangir also emphasises the importance of creating a dedicated policy for critical minerals, covering everything from supply to refining.
In addition, attracting global battery manufacturers to set up facilities in India will be essential. The scheme was designed to draw both domestic and international players, and the presence of established global firms could strengthen capabilities, bring advanced technologies into the country, and help guide the sector in the right direction, says Vibhuti Garg, Director – South Asia at IEEFA.
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