India needs ₹33,750 cr investment to achieve domestic li-ion battery manufacturing target: CEEW

India needs investments worth up to $33,750 crore to achieve the government production-linked incentive (PLI) target of setting up 50 gigawatt hours (GWh) of lithium-ion cell and battery manufacturing plants, according to the latest report by the Council on Energy, Environment and Water (CEEW). 

Titled ‘How can India indigenous lithium-ion battery manufacturing?’ the report says the country requires up to 903 GWh of energy storage to decarbonise its mobility and power sectors by 2030, and lithium-ion batteries will meet the majority of this demand.

"For a green future, minerals like lithium will be as important as oil and gas are today. It's in India's strategic interest to secure not just the mineral, but also set up the required cell and battery manufacturing systems within the country. It will reduce our dependence on other countries in the long run, and power our grid and EV transition," says Rishabh Jain, senior program lead, CEEW.

"This year's Budget has shown India's interest in addressing these challenges by eliminating duties on battery manufacturing equipment and providing viability gap funding for battery projects. To scale up domestic lithium-ion manufacturing, India should step up R&D investments, focus on battery cell component manufacturing and reducing material costs, and support recycling to reduce the need for new materials," he adds.

As per the report, to fulfil the overall battery demand, India will need 969-1,452 kilotonnes of anode, cathode, and electrolyte materials, which are components for lithium-ion batteries between 2022 and 2030. This requires the country to prioritize other energy storage technologies as well.

"Development and deployment of batteries will have far-reaching impacts on India's energy transition journey. Currently, India is import-dependent but the government has already started mobilizing resources to indigenize battery cell manufacturing. The focus on mineral processing and component manufacturing are, however, limited," says Dhruv Warrior, research analyst at CEEW.

Earlier this month, the Geological Survey of India (GSI) discovered 5.9 tonnes of lithium deposits in the G3 category in the Salal-Haimana area of the Reasi District of Jammu and Kashmir. This was the first discovery of lithium deposits in the country. The discovery is touted to be essential for India’s transition to clean energy and will support the domestic manufacturing of electric vehicles, and smartphones. However, experts say the discovery of lithium deposits in the G3 category would require more research and studies to reach the final 'confident G1 or G2' category of 'mineable reserves.’ It would also take another 5 to 7 years to use lithium deposits commercially.

In the Union Budget 2023, the government exempted customs duty on imports of capital goods and machinery for manufacturing of li-ion cells for electrical vehicle (EV) batteries, to boost battery production and EV penetration in India. In 2020-21, India imported an estimated ₹8,800 crore worth of lithium batteries 2020-21 and over ₹170 crore worth of lithium metal. As per NITI Aayog, India’s battery storage market is expected to reach more than 1000 GWh by 2030, translating into a cumulative market size of ₹25,000 crore.