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By Piyush P. Yadav

India is building the ingredients of a lithium-ion battery faster than it is building the battery. Synthetic graphite anodes, electrolyte salts and cathode precursors are going up in Karnataka, Gujarat and Maharashtra on the back of a chemicals industry whose costs run about 70 per cent below competing markets, while the cell gigafactories that were supposed to consume those materials have slipped, paused or shrunk. The Production Linked Incentive scheme for Advanced Chemistry Cells, approved in May 2021 with a target of 50 GWh of domestic cell capacity by December 2024, had delivered 1.4 GWh from a single company by October 2025 and had paid out no incentive at all. This explainer maps the Indian battery supply chain layer by layer, from mined lithium to finished pack, shows where the money is going and where it is not, and works out what the gap between materials and cells means for the price of an electric car in 2027.

The five layers of a battery, and where India stands in each

Layer Share of cell value Indian capacity, September 2026 Import dependence
Raw materials (lithium, nickel, cobalt, graphite) About 30 to 40 per cent, price-dependent No commercial lithium mining; Khanij Bidesh India signing overseas offtake deals Near-total
Processed materials (anode, cathode, electrolyte, separator) About 25 to 30 per cent Anode: Epsilon 30,000 tonnes a year by 2027. Electrolyte salts: Neogen, Gujarat Fluorochemicals. Cathode: no commercial plant. Separator: none. High, falling in anode and electrolyte
Cell manufacturing 70 to 75 per cent of finished battery value Ola Electric (the only PLI producer in operation), Exide’s Bengaluru plant starting, Agratas under construction, Amara Raja delayed to FY2027 Over 90 per cent
Pack assembly 25 to 30 per cent of finished battery value Dozens of plants; every Indian EV maker assembles packs from imported cells Low for assembly, total for cells
Recycling Cost centre today; future material source Attero, Lohum, others; targets under the 2022 Battery Waste Rules Not applicable

The share-of-value figures explain why the pack-assembly capacity the government counts as “battery manufacturing” does not move the needle. A pack plant that imports finished cells captures a quarter of the value chain at most. The government’s tally of 178 GWh of announced capacity is overwhelmingly this kind of assembly. The cell, where three-quarters of the value and almost all of the technology sit, is where India’s capacity is still measured in single-digit gigawatt-hours.

The materials layer: where India is actually winning

Anodes

Epsilon Advanced Materials, headquartered in Mumbai, signed a memorandum of understanding worth about $1.1 billion with the Karnataka government for a synthetic graphite anode plant that will reach 30,000 tonnes a year by 2027 and 100,000 tonnes by 2030. Its managing director, Vikram Handa, has said about 90 per cent of that output is contracted to overseas cell makers in the United States and Europe rather than to Indian cell plants, because there are not yet Indian cell plants to sell to. Epsilon has also committed $650 million to an anode facility in North Carolina, described as the largest Indian investment in the US battery industry. The company is a supplier to Ola Electric’s cell line, which is the one domestic exception.

Electrolyte

Neogen Chemicals has put Rs 100 crore into its Neogen Morita New Material subsidiary to develop electrolyte salts, and Gujarat Fluorochemicals is building lithium hexafluorophosphate capacity for both domestic and export customers. Electrolyte is a fluorine-chemistry product, and India’s fluorochemicals industry is one of the largest outside China, which is why this is the layer where the country has a genuine cost advantage rather than a policy-created one.

Cathode

This is the missing layer. Cathode active material, whether LFP or NMC, is the single most valuable processed input, and India has no commercial cathode plant. Ola sources cathode from Umicore in Belgium. The precursor chemicals for NMC cathodes are among the items China placed under export licensing in October 2025, alongside graphite and, critically, the know-how licences that a new gigafactory needs to run its lines.

The cell layer: the scorecard nobody wanted

We published a plant-by-plant Indian lithium cell manufacturing scorecard last week when Ola’s Bharat Cell went into a production scooter. The supply-chain view adds the reasons behind the delays.

Company Plan Status, September 2026 Technology source
Ola Electric PLI awardee; 4680 NMC cells at Krishnagiri Producing; about 1.4 GWh counted under PLI by October 2025; cells in the S1 Pro+ since November 2025 In-house design; Umicore cathode, Epsilon anode, StoreDot fast-charge licence, Korean equipment
Reliance New Energy PLI awardee; LFP cells at Jamnagar Licensing talks with CATL and Xiamen Hithium collapsed after the Chinese partner withdrew; facility refocused on assembling storage systems from imported cells Acquired Lithium Werks (Netherlands) and Faradion (UK) for LFP and sodium-ion IP
Amara Raja 4 GWh initial phase, cylindrical NMC and LFP, Telangana Start of production pushed back a year to FY2027 Gotion High-Tech (China) licence, June 2024
Exide Energy 6 GWh first phase, Bengaluru; Hyundai-Kia supply deal Commercial production slated for 2026 SVOLT (China) licence, 2022
Agratas (Tata) 20 GWh, Sanand, outside PLI Under construction; targeting 2027 In-house with UK research links
Log9 Materials LTO cells, Bengaluru Cells worked but cost four times Chinese equivalents; company close to bankruptcy after raising over $90 million In-house

Two patterns stand out. First, the plants closest to production are the ones with a foreign licence, and the licences are Chinese. Amara Raja and Exide together hold seven battery patents; CATL holds more than 43,000 and LG Energy Solution about 70,000. The October 2025 controls did not cancel existing licences but they put every new one, and every equipment order that comes with process know-how, behind a Beijing approval. Second, the one company that tried to do without a licence and without Chinese economics, Log9, produced a working cell and could not sell it at a competitive price. Tata’s Agratas plant, which we profiled in our Agratas gigafactory report, is the largest bet on the in-house route and will be the test of whether it can be done at scale.

What the gap costs an EV buyer

A domestic NMC cell, where it exists, is priced at roughly the same level as an imported one once logistics and GST are accounted for. That means localisation is not yet cutting the sticker price of an Indian EV; it is holding it level while protecting against the currency and duty risk that comes with importing every cell. The material plants matter to the buyer for a different reason. When Indian cell plants do come online in 2027, having domestic anode and electrolyte supply is what will allow them to price below imports rather than at parity, because those two inputs are where the Indian cost advantage is real.

For the next 18 months the practical effect is on chemistry choice rather than price. LFP cells, which need no nickel or cobalt and whose cathode precursors are less tightly controlled, are the ones Indian manufacturers can source most reliably, which is why nearly every mass-market Indian EV has moved to LFP. Our guide to LFP versus NMC in Indian EVs lists every model by chemistry. The same supply logic drives the interest in sodium-ion, which needs neither lithium nor graphite and which we covered when MNRE put sodium-ion at technology readiness level 7.

What would close the gap

  • Pay the PLI on materials, not just cells. The scheme rewards cell output, which is the layer India has least of. Extending it to cathode and separator production would target the two missing layers directly.
  • Build one cathode plant. Every Indian cell plant imports cathode. A single 20,000-tonne LFP cathode line would supply about 10 GWh of cells and remove the most controlled input from the import list.
  • Use the export plants as anchor customers. Epsilon’s 90 per cent export ratio is a symptom, not a strategy. Domestic cell plants that sign long-term anode and electrolyte contracts now will have priced-in supply when they start.
  • Stop counting pack assembly as cell capacity. The 178 GWh headline number obscures how little of it is cells. On our count an honest scorecard would show a few gigawatt-hours operating and perhaps 30 GWh genuinely under construction, which is the number policy should be built on.

The same import problem applies to the motor as to the battery: India imports all of its EV traction magnets, as we set out in our report on the rare earth magnet localisation plan. The battery supply chain is further along, because the materials layer is being built. Whether the cells follow is the question that will decide how much of an Indian EV is Indian by 2030.

Sources & Further Reading

Frequently asked questions

How much lithium-ion cell capacity does India actually have?

Very little. The PLI scheme targeted 50 GWh by December 2024; by October 2025 it had counted 1.4 GWh from a single producer, Ola Electric, and had disbursed no incentive. The 178 GWh figure sometimes quoted is mostly pack assembly using imported cells.

Which parts of the battery supply chain is India building?

Anodes and electrolyte. Epsilon is building a synthetic graphite anode plant in Karnataka reaching 30,000 tonnes a year by 2027, and Neogen and Gujarat Fluorochemicals are building electrolyte salt capacity. India has no commercial cathode or separator plant.

What did China restrict in October 2025?

Export licensing was formalised for graphite, cathode precursors and the technology licences that new gigafactories need to operate their lines. Existing licences continued, but new ones and know-how-bearing equipment orders now require approval.

Will Indian-made cells make EVs cheaper?

Not immediately. Domestic NMC cells are currently at rough parity with imports once logistics and GST are counted. The cost advantage comes later, when domestic cell plants can use Indian anode and electrolyte, which are the inputs where India’s chemicals costs are genuinely lower.