India’s EV Supply Chains

The Need for Strengthening India’s EV Supply Chains

• India’s electric vehicle adoption has entered a strong growth phase around 2.5 million EVs were sold in FY26, showing a major rise from FY25.This growth reflects the success of policy support by the Centre and State. Government measures such as purchase incentives, road tax exemptions and demand-side interventions helped create the initial EV market.

Rising EV Adoption in India

• India’s road transport electrification has moved from the initial stage to a decisive growth phase.
• EVs are now being accepted as a credible and tested technology.
• Policy support has reduced consumer hesitation and helped expand the EV market.
• The next phase of EV adoption requires a stronger industrial and supply chain strategy.

 Import Dependence as a Strategic Risk

• India is moving away from imported fossil fuels but is becoming dependent on imported lithium-ion batteries.
• This creates a new strategic vulnerability for India’s clean mobility transition.
• The challenge is no longer only about increasing EV sales.
• The real challenge is to expand EV adoption without creating another external dependence.

 Weak Domestic Battery Manufacturing

• India’s domestic cell manufacturing capacity is still far below the required scale.
• Under the ACC Battery Production Linked Incentive Scheme, 40 GWh capacity has been awarded.
• However, only about 1 GWh has been installed so far.
• This shows a large gap between policy targets and actual manufacturing capacity.

 China-Centric Battery Supply

• Passenger EVs sold in India are sourcing batteries from 14 global manufacturers; around 7,987 MWh of batteries were imported in 2025.
• A significant share of these batteries came from Chinese manufacturers.
• China influences pricing, availability and technology access in the battery market.
• Several developments in China are affecting supply, such as tighter technology restrictions and priority to domestic demand.

 Impact of Geopolitical Disruptions

• The West Asia conflict has further increased pressure on the battery supply chain.
• It has led to higher raw material costs, increased manufacturing expenses and rising transport risk premiums.
• Such disruptions increase costs for Indian original equipment manufacturers.
• Ultimately, higher costs may be passed on to consumers.

Need for Flexible and Future-Ready Battery Ecosystem

• India’s EV transition now requires a more resilient and future-ready supply chain strategy. 
• Indian manufacturers must develop flexible, software-defined battery platforms that can support multiple chemistries and reduce dependence on repeated hardware redesign. 
• At the same time, emerging technologies such as sodium-ion batteries should be tested and scaled domestically to reduce reliance on a single battery chemistry or supplier.

Further, India needs a structured EV supply chain alliance with trusted partners across minerals, manufacturing, technology and standards. Such an approach will distribute risks across geographies, strengthen domestic industrial capability and protect India’s electrification agenda from external disruptions. Thus, while India has successfully created demand for clean mobility, the next challenge is to build the industrial depth needed to sustain it through domestic manufacturing, diversified sourcing, flexible technologies and stronger supply chain partnerships.