India could remain 10-15 years away from a globally competitive, self-sufficient battery cell industry, while pushing domestic content in grid-scale battery storage projects to 100% could increase project capital costs by around 30%, highlighting the cost and supply-chain challenge confronting the country’s rapidly expanding storage market.
The gap is already stark. India has only 2 GWh of commissioned cell manufacturing capacity in 2026, accounting for less than 1% of the approximately 260 GWh battery demand pipeline from competitive tenders, according to Wood Mackenzie’s Chasing Self-Sufficiency: Cost of Building an Indigenous Battery Storage Supply Chain in India report.
While more than 226 GWh of cell manufacturing capacity has been announced for construction through 2035, execution delays, financial viability challenges and dependence on Chinese and Korean technology licensors could slow localisation.
“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.”
China, in comparison, has 2,695 GWh of cumulative cell manufacturing capacity and controls between 85% and 98% of global capacity across cathodes, anodes, separators and electrolytes.
India is therefore expected to pursue a downstream-first strategy. Containers, energy management systems, SCADA and battery packs could see localisation over the next two-three years, supported by the 20% domestic content requirement being applied to new grid-scale BESS tenders.
However, Wood Mackenzie estimates that raising domestic content requirements from below 20% to 100% adds about 30% to total capex for a benchmark 100-MW, two-hour battery storage project.
Locally manufactured cells themselves are expected to cost 25-40% more than imported cells, reflecting limited scale, higher financing costs and an underdeveloped supplier ecosystem. Yet India has a 154% cost advantage over Japan and 9% over South Korea, placing it behind only China among major manufacturing destinations.
Scale remains crucial to economics. Only four players have commissioned gigafactories in India as of 2026. A 5-GWh facility operates at -10% EBITDA, while breakeven is achieved at 10 GWh and positive margins require at least 20 GWh, the report said.
Cell manufacturing is expected to expand with imported inputs over the next two-five years, while full domestic refining capabilities could take more than a decade.
“India’s cost position is genuinely competitive in a global context,” said Priya Shrivastava, senior research analyst, Wood Mackenzie. “The challenge is closing the execution gap fast enough to capture that opportunity before other emerging manufacturing hubs do.”