India's Lithium-Ion Battery Import Dependency to Drop to 20 Percent by FY27- Report
India's demand for lithium-ion batteries is set to rise significantly, driven by EV adoption and renewable energy storage. Import dependency, currently near 100 percent, is expected to fall to 20 percent by FY27 due to the development of domestic giga-scale battery manufacturing capacities, among other factors.
November 15, 2024. By EI News Network
As per ther report, the Indian government has allocated 40 GWh of integrated battery production capacities under the Advanced Chemistry Cell (ACC) Production Linked Incentive (PLI) scheme has helped reduce dependance on imports. The capacity is further expected to increase in the coming years. Various State government incentives such as capital subsidies, electricity tax and stamp duty exemptions and interest subvention will also contribute towards reducing reliance on imports.
Also, the increased focus on establishing local manufacturing capacities, coupled with policies aimed at improving cost competitiveness, will help reduce reliance on imports. Despite India having limited natural reserves of critical minerals like lithium, cobalt, and nickel, securing long-term supply chains and investing in battery reuse and recycling will be essential to meet the growing demand and mitigate supply risks.the country aims to achieve 50 percent of its primary energy requirements from renewable sources by 2030, which will necessitate the widespread adoption of EVs and substantial grid storage capacity.
In FY24, India's demand for Li-ion batteries was around 15 GWh, mainly from EVs and consumer electronics. However, demand is expected to grow exponentially to approximately 54 GWh by FY27 and 127 GWh by FY30. This surge in demand is attributed to government-backed initiatives like the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme and the Viability Gap Funding (VGF) scheme for Battery Energy Storage Systems (BESS), which aim to drive EV adoption and the decarbonisation of India's electricity grid.
The cost of Li-ion batteries has dropped significantly over the last decade, from 780 USD/kWh in 2013 to just 139 USD/kWh in 2023, due to technological advancements and economies of scale. This has made Li-ion batteries the dominant technology for EVs and energy storage.
India's lithium-ion battery storage demand growth is expected to be predominantly driven by the shift to EVs and the growing need for renewable energy storage, with the government’s ambitious renewable energy targets further fueling the demand. The country is on track to become less dependent on imports, with the domestic battery manufacturing sector gearing up to meet the needs of the rapidly expanding market.
As EV penetration increases—projected to be 8 percent in 4-wheelers and 14 percent in 2-wheelers by FY27—the lithium-ion battery storage market is expected to evolve significantly. By FY30, with further advancements in manufacturing capabilities and policy support, India will be well-positioned to meet its energy transition goals while reducing its reliance on foreign imports.
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