India competitive on battery costs but must scale cell manufacturing: Wood Mackenzie

India’s battery manufacturing is competitively positioned globally but remains structurally dependent on imports and must rapidly scale cell manufacturing to meet demand, a report said on Thursday. The report from Wood Mackenzie said India offers a 154 per cent cost advantage over Japan and a 9 per cent advantage over South Korea, placing it second only to China among major manufacturing destinations. However, locally manufactured cells are expected to cost 25–40 per cent more than imported ones in the near term because of limited scale, higher financing costs and an underdeveloped supplier ecosystem.

"Cell manufacturing is expected to develop progressively with imported inputs over the next two to five years, while full refining capabilities will take more than ten years to establish," the report forecasted. India’s domestic cell manufacturing currently accounts for less than 1 per cent of its approximately 260 GWh demand pipeline from competitive tenders in 2026, the report added. The shortfall in supply leaves the country structurally dependent on imports even as policy ambition accelerates.

Despite more than 226 GWh of cell manufacturing capacity announced for construction through 2035, execution delays, financial viability challenges and deep technology dependence on Chinese and Korean licensors mean India remains 10 to 15 years from a globally competitive, self-sufficient cell industry. India has just 2 GWh of commissioned cell manufacturing capacity as of 2026, against China's cumulative capacity of 2,695 GWh. China controls between 85 per cent and 98 per cent of global capacity across every major supply chain component, from cathode to anode, separator and electrolyte.

Bridging that gap will require India to fundamentally restructure its manufacturing ecosystem, the report noted. "India's battery storage ambitions are credible, but the gap between policy intent and operational capacity is wide," said Ankita Chauhan, director, Wood Mackenzie. "The near-term opportunity lies in downstream components such as containers, EMS, and battery packs, where localisation is both technically feasible and commercially attractive," Chauhan added.

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