In early 2024, a Pune-based auto-component maker stood at a crossroads — his clients had shifted to electric vehicles, and traditional lead-acid battery suppliers could not keep up with the new specifications required for EV powertrains. Within eighteen months, three new lithium-ion battery manufacturing units had opened in his district alone. That story is playing out across India, as the electrification of transport pulls an entire generation of entrepreneurs into the battery business — the infrastructure backbone of India's clean energy transition.
The numbers are striking. India sold 48% of its two-wheelers in top-10 cities as electric in 2025, up from 38% in 2024. Amara Raja Batteries announced gigafactory operations before end of 2025. Panasonic and Indian Oil signed a joint venture for cylindrical Li-ion battery production. These are not distant trends — they are the demand floor for anyone building a battery manufacturing unit in India today.
Why Battery Manufacturing Is India's Most Electrifying Business Opportunity
The case for entering battery manufacturing rests on one transformational fact: India's battery market is growing at a pace that dwarfs almost every other manufacturing sector. The India lithium-ion battery market was valued at USD 4.3 billion in 2024 and is forecast to reach USD 25.3 billion by 2032, growing at a CAGR of 22.1% (GMI Research, 2026). This is not modest expansion — it is structural industry creation.
Three converging forces drive this growth. First, EV adoption: Electric two-wheelers seized 48% of all two-wheeler sales in India's top-10 cities in 2025, driven by FAME-II subsidies that trimmed upfront prices by up to 30%. The government plans to have 30% of its vehicle fleet electric by 2030. Every EV needs a battery. Second, renewable energy storage: India's solar and wind capacity additions require grid-scale energy storage, and lithium-ion batteries are the preferred technology. Third, consumer electronics: Smartphones, laptops, and wearables continue to drive steady demand for Li-ion cells across all capacity ranges.
India's lithium-ion battery market will grow from USD 4.3 billion (2024) to USD 25.3 billion by 2032 — a nearly 6x increase. This is the fastest-growing major manufacturing segment in the country, driven by EVs, renewable energy storage, and consumer electronics. The government's ACC-PLI programme commits ₹18,100 crore to catalyse 50 GWh of domestic capacity by 2030.
The lead-acid battery market, though growing more modestly, remains enormous. At USD 46 billion in 2023 and growing at 4.9% CAGR through 2032 (Intellectual Market Insights), lead-acid batteries power everything from automotive starting applications to UPS systems, telecom towers, and industrial equipment. For an MSME entering battery manufacturing, lead acid battery business offers lower technology entry barriers than Li-ion, established raw material supply chains, and strong domestic demand from telecom, automotive aftermarket, and industrial sectors.
Battery recycling presents a third, often-overlooked entry point. India's growing fleet of electric vehicles will create a massive battery waste stream in the coming decade. The battery recycling market is projected to reach 22–23 GWh by 2030 (Ministry of Heavy Industries estimates). Environmental regulations mandate responsible disposal, and recycled lead and lithium command strong market prices. A battery recycling business therefore enjoys both regulatory mandates and material economics in its favour.
Government policy is perhaps the most decisive driver. The Production Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC) batteries commits ₹18,100 crore to enable 50 GWh of domestic manufacturing capacity. Reliance New Energy's 10 GWh Jamnagar plant and Ola Electric's 20 GWh Tamil Nadu gigafactory are among the biggest beneficiaries. FAME-II disbursed ₹7,500 crore in subsidies by March 2025, covering 1.2 million electric two-wheelers and 18,000 e-buses. PM E-DRIVE, succeeding FAME-II, extends demand incentives through 2027 — giving manufacturers a visible demand horizon.
India's discovery of lithium reserves in Jammu & Kashmir and Rajasthan's Degana region adds a long-term supply security argument for domestic battery manufacturers. While domestic lithium mining will take years to develop, the strategic intent signals India's commitment to reducing import dependence on Li-ion raw materials — a risk factor that currently constrains margins for smaller manufacturers.
India Battery Market: Demand Trends and the Numbers That Matter
India's total battery market is projected to grow at a CAGR of 22.64% in revenue from 2026 to 2035, reaching 3,662 million units by 2035 from 252 million units in 2025 (NextMSC analysis, 2026). This volume explosion reflects a market that is only beginning its structural shift from internal combustion vehicles and grid-dependent infrastructure to battery-powered alternatives.
Secondary batteries — primarily lithium-ion — hold the largest market share due to widespread adoption in EVs, consumer electronics, and grid-scale storage. Cylindrical cells dominate Indian demand with over 50% market share in 2024, driven by their widespread use in electric two-wheelers, laptops, and power tools. Li-NMC (Lithium Nickel Manganese Cobalt) chemistry accounts for 35% of the Li-ion market, preferred for its balance of energy density and safety.
Year-Wise India Battery Market Size Estimate (Li-Ion + Lead Acid Combined)
|
Year
|
Market Size (USD Bn)
|
Key Driver
|
CAGR Assumption
|
|
2020
|
12.5
|
Telecom UPS, automotive replacement
|
—
|
|
2021
|
13.8
|
Post-COVID EV adoption surge begins
|
~10%
|
|
2022
|
16.2
|
FAME-II subsidies, 2W EV growth
|
~17%
|
|
2023
|
20.1
|
Li-ion demand from EVs accelerates
|
~24%
|
|
2024
|
24.5
|
Consumer electronics, grid storage
|
~22%
|
|
2027F
|
42.0
|
PLI capacity going live
|
~20%
|
|
2030F
|
75.0
|
30% EV fleet target momentum
|
~21%
|
|
2035F
|
160.0
|
Full EV mainstream + grid storage scale
|
~16%
|
Note: Combined Li-Ion and Lead Acid market estimate. CAGR assumption based on GMI Research, Mordor Intelligence, and industry estimates. Figures are rounded projections.
Electric two-wheelers now account for 48% of two-wheeler sales in India's top 10 cities in 2025 — up from 38% in 2024. Each EV two-wheeler uses 1.5–3 kWh of Li-ion battery capacity. With India producing over 19 million two-wheelers annually, the battery demand implication is enormous for domestic manufacturers.
What Government Data Reveals About India's Battery Manufacturing Potential
Government statistics confirm that the battery manufacturing sector has moved from being a policy aspiration to an active investment destination. The Ministry of Heavy Industries' ACC-PLI programme earmarked ₹18,100 crore (approximately USD 2.17 billion) to catalyse 50 GWh of domestic cell production by 2030. By mid-2025, the government disbursed ₹7,500 crore under FAME-II, subsidising 1.2 million electric two-wheelers and 18,000 e-buses.
DPIIT data shows that FDI inflows into India's battery and electronics manufacturing sector have accelerated since 2022 as global OEMs seek to reduce supply-chain concentration in China. India's battery import bill has historically been substantial, creating a powerful import substitution argument for domestic producers. The Ministry of New and Renewable Energy's (MNRE) tender pipeline for grid-scale battery energy storage systems has also grown rapidly, with several hundred megawatt-hours of storage contracted in 2024 alone.
Government & Department Statistics Table: India Battery Sector
|
Parameter
|
Data Point
|
Year/Period
|
Source
|
|
ACC-PLI Battery Scheme Outlay
|
₹18,100 crore for 50 GWh capacity
|
2021–2030
|
Ministry of Heavy Industries
|
|
FAME-II Disbursements
|
₹7,500 crore; 1.2 Mn 2W + 18,000 e-buses
|
By March 2025
|
Ministry of Heavy Industries
|
|
EV 2-Wheeler Share (Top 10 Cities)
|
48% of two-wheeler sales
|
2025
|
Mordor Intelligence / Govt data
|
|
Li-Ion Battery Market Size (India)
|
USD 4.3 billion
|
2024
|
GMI Research
|
|
Lead Acid Battery Market (India)
|
USD 46 billion
|
2023
|
Intellectual Market Insights
|
|
Battery Recycling Market Target
|
22–23 GWh
|
By 2030
|
Ministry of Heavy Industries
|
|
India Lithium Reserves Discovery
|
Approx. 5.9 million tonnes
|
2023–24
|
Geological Survey of India
|
|
PM E-DRIVE Scheme Extension
|
Demand incentives through 2027
|
2025
|
Ministry of Heavy Industries
|
The Geological Survey of India's discovery of lithium reserves in Jammu & Kashmir (estimated at approximately 5.9 million tonnes) and Rajasthan's Degana region transforms the long-term supply security calculation for Indian battery manufacturers. Domestic lithium extraction, when commercially operational, would reduce India's dependence on imports from Australia, Chile, and Argentina — materially improving the cost competitiveness of Indian Li-ion battery producers in global markets.
Consultant's Note
For an MSME entrepreneur, lead-acid battery manufacturing or battery plate production offers a more accessible entry than Li-ion cell manufacturing, which requires cleanroom facilities and specialised equipment. However, battery separators, battery assembly (pack-level), and battery recycling are all MSME-viable Li-ion adjacent activities. Start by assessing whether your market is automotive replacement, telecom UPS, industrial, or EV — each has different specifications, certifications, and buyer profiles. BIS certification (IS 16046-2 for Li-ion, IS 1652 for lead-acid) is mandatory for domestic sale.
Government Schemes and Incentives for Battery Manufacturers
ACC-PLI (Advanced Chemistry Cell Production Linked Incentive): ₹18,100 crore for 50 GWh domestic cell manufacturing. 20% value-addition subsidy in the first five years. Minimum investment thresholds apply — primarily relevant for large-scale manufacturers.
FAME-II and PM E-DRIVE: Demand-side incentives for EVs that directly create pull for domestic battery manufacturers. EV-related demand subsidies through March 2027 provide a clear demand horizon for battery production planning.
MSME Technology Upgradation Fund (CGTMSE): Collateral-free loans up to ₹5 crore for battery plate manufacturers, battery separator units, and recycling plants. Accessible through scheduled commercial banks and SIDBI.
Make in India and PLI Scheme Benefits: 100% FDI is permitted in battery manufacturing under the automatic route. Government procurement preference for domestically manufactured batteries in defence and railway applications provides a captive market for certified domestic producers.
State-Level Incentives (Gujarat, Tamil Nadu, Maharashtra): Gujarat's industrial policy offers electricity tariff subsidies, land allotment in GIDC estates, and capital investment subsidies for battery manufacturing units. Tamil Nadu — where Ola Electric's gigafactory is located — has designated battery manufacturing as a priority sector. Maharashtra's EV Policy 2021 provides additional demand-side incentives that benefit local battery producers.
Import–Export Opportunity in India's Battery Sector
India currently imports a substantial share of its lithium-ion cell requirements — particularly cylindrical cells used in EV two-wheelers, consumer electronics, and energy storage. Key import sources include China, South Korea, and Japan. The import dependence creates both a vulnerability and an opportunity: domestic manufacturers who can match international cell specifications can displace imports across multiple application segments.
On the export side, India's battery sector is nascent but growing. Indian lead-acid battery manufacturers — particularly Exide, Amara Raja, and HBL Power — export to Southeast Asia, Africa, and the Middle East, where India's cost advantage is meaningful. As Li-ion manufacturing scales up under PLI, India has the potential to become a regional battery export hub for South and Southeast Asia, particularly for EV applications.
Battery separator manufacturing and battery plate manufacturing represent strong import substitution opportunities for MSMEs — both are currently imported at scale and are technically accessible to mid-size Indian manufacturers with the right BIS certifications and quality systems.
Key Players in India's Battery Manufacturing Sector
|
Company
|
Key Activity / Specialisation
|
|
Exide Industries Ltd
|
India's largest lead-acid battery maker; automotive, industrial, and UPS batteries; expanding into Li-ion
|
|
Amara Raja Batteries Ltd
|
Second-largest lead-acid producer; announced Li-ion gigafactory for 2025 operations in Telangana
|
|
Ola Electric
|
EV-focused Li-ion pack manufacturer; 20 GWh Tamil Nadu gigafactory under PLI scheme
|
|
Reliance New Energy
|
10 GWh Li-ion facility in Jamnagar, Gujarat; PLI beneficiary; integrated battery value chain plan
|
|
HBL Power Systems
|
Specialist batteries — defence, railways, telecom; niche market with high margins
|
|
Luminous Power Technologies
|
Inverter batteries, home UPS; strong distribution network across India
|
|
Okaya Power Ltd
|
Lead-acid batteries for automotive, UPS, e-rickshaw; strong tier-2/3 city presence
|
|
Panasonic Energy (JV with Indian Oil)
|
Cylindrical Li-ion cells for EV applications; announced JV in March 2024
|
Battery Market Growth Trajectory Through 2035
India's battery market is set to be one of the defining manufacturing sectors of the next decade. The overall market is projected to grow from 252 million units in 2025 to 3,662 million units by 2035 — a CAGR of 28.44% in volume terms (NextMSC, 2026). In revenue, the total battery market is expected to grow at a 22.64% CAGR through 2035.
The structural demand is clear: India's stated goal of 30% EV fleet by 2030, combined with 500 GW of renewable energy capacity addition and massive telecom infrastructure investment, creates a multi-decade demand floor for battery manufacturers across technology types. By 2035, the lithium-ion segment alone is expected to exceed USD 160 billion globally, with India accounting for a rapidly growing share.
A business started in battery manufacturing today — whether in lead-acid plates, Li-ion pack assembly, battery separators, or recycling — will benefit from decade-long structural demand growth, government support, and an increasingly favourable domestic supply chain as PLI investments come online.
Practitioner Q&A: Battery Manufacturing Business in India
Q1: What is the minimum investment to start a lead-acid battery manufacturing unit?
A small-scale lead-acid battery manufacturing unit producing 50–100 batteries per day can be started for approximately ₹50–80 lakh, covering battery plate making equipment, assembly lines, charging and testing facilities, and basic infrastructure. Pollution Control Board (PCB) clearance is mandatory given lead processing. A medium-scale unit for automotive replacement batteries typically requires ₹1.5–3 crore.
Q2: Do I need BIS certification to sell batteries in India?
Yes. BIS certification is mandatory for most battery categories under compulsory certification orders. Li-ion batteries must comply with IS 16046-2. Lead-acid automotive batteries must comply with IS 1652. Sealed maintenance-free batteries have separate IS specifications. Without valid BIS certification, you cannot legally sell to OEMs, telecom companies, or institutional buyers. Factor 4–6 months for BIS certification process into your project timeline.
Q3: Is battery recycling a viable MSME business in India?
Yes, particularly for lead-acid battery recycling, which is the most commercially established battery recycling segment in India. Authorised lead-acid recyclers must comply with the Batteries (Management and Handling) Rules and obtain pollution control clearances. Recovered lead can be sold directly to battery manufacturers or smelters at market prices. Li-ion recycling is an emerging opportunity — regulatory mandates are tightening and the recovered materials (cobalt, nickel, lithium) command strong prices.
Q4: How does the ACC-PLI scheme benefit battery manufacturers?
The ACC-PLI scheme commits ₹18,100 crore over five years to incentivise domestic cell manufacturing at scale (50 GWh target). Beneficiaries receive a 20% value-addition subsidy in the first five years of production. However, the minimum investment threshold is substantial — designed for large-scale players. MSMEs can participate indirectly as component suppliers to PLI beneficiaries — battery separators, electrode materials, casings, and BMS (Battery Management Systems) are all sourcing opportunities.
Q5: Which battery segment is best for a first-time MSME entrepreneur?
Battery plate manufacturing, battery assembly (pack-level for EV two-wheelers and e-rickshaws), and maintenance-free sealed lead-acid batteries for UPS and telecom are the most MSME-accessible segments. Battery assembly using imported cells is lower-investment than cell manufacturing — you source cells, assemble packs with BMS, and sell to EV manufacturers. Several Rajasthan and Gujarat-based MSMEs have successfully established this model for e-rickshaw battery packs.
Q6: What are the key technical certifications needed for EV battery packs?
EV battery packs sold to OEMs must comply with AIS 156 (Indian standard for EV batteries, including thermal runaway and vibration requirements), IS 16046-2 (Li-ion cell standard), and any OEM-specific qualification requirements. Testing is typically done at ARAI (Pune), NATRiP testing centres, or BIS-accredited private labs. AIS 156 compliance is mandatory for selling to any approved EV OEM — factor 3–6 months for testing and certification.
Q7: Can I manufacture battery separators as a standalone MSME product?
Yes. Battery separators — both polyethylene (PE) separators for lead-acid and polyolefin separators for Li-ion — are manufactured by specialised MSME players in India. Domestic separator manufacturing is a direct import substitution play, as India imports substantial volumes from China and Japan. The technology is accessible at medium investment levels, and demand from both Exide and Amara Raja (as lead-acid manufacturers) provides a reliable domestic buyer base.
Q8: What is India's target for EV adoption, and how does it affect battery demand?
The Government of India targets 30% electric vehicles in the fleet by 2030. India's FAME-II and PM E-DRIVE schemes are the primary demand-pull mechanisms. By 2025, electric two-wheelers already captured 48% of sales in India's top-10 cities. If the 30% fleet target is even partially achieved, the annual battery demand for automotive applications alone could reach 50–80 GWh by 2030 — a figure that would require massive domestic manufacturing expansion beyond current PLI-backed capacity.
Q9: What pollution compliance requirements apply to lead-acid battery manufacturing?
Lead-acid battery manufacturing involves lead — a Schedule-I hazardous substance under the Environment Protection Act. New plants require State Pollution Control Board (SPCB) consent-to-establish and consent-to-operate. An Environmental Impact Assessment (EIA) may be required above certain production thresholds. Lead handling, effluent treatment, and waste disposal systems must comply with Hazardous Waste Management Rules. MSME units must maintain a clean-tech lead handling standard to meet buyer and export compliance requirements.
Q10: Are there cluster-based development schemes for battery manufacturers?
Yes. The MSME Ministry's Cluster Development Programme (CDP) and the DPIIT's industrial parks framework support battery manufacturing clusters, particularly in states with EV policy focus. Rajasthan (Neemrana, Bhiwadi), Tamil Nadu (Hosur-Chennai corridor), and Gujarat (Sanand, Dholera) have either established or are developing battery manufacturing clusters with shared infrastructure, power supply, and logistics advantages for MSME participants.
The Bottom Line
India's battery manufacturing industry is at an inflection point unlike any other manufacturing sector. The government has committed ₹18,100 crore to build domestic cell manufacturing capacity. EV adoption is accelerating past expectations. The lead-acid replacement market remains enormous and stable. Grid-scale storage, telecom, and consumer electronics add multiple demand layers.
For a startup or first-time MSME investor, the entry points are real and accessible: battery plate manufacturing, pack assembly for EV two-wheelers, maintenance-free sealed batteries for telecom UPS, or battery recycling all offer manageable investment levels and proven demand. The key government support mechanism is CGTMSE for collateral-free finance and FAME-II/PM E-DRIVE for demand visibility.
The most important first step is to identify your target application segment — automotive, telecom, EV two-wheeler, industrial UPS — and then engage with your State PCB (for lead-acid) or BIS (for Li-ion) on certification requirements. A clear certification path, coupled with even one anchor buyer relationship among India's growing fleet of EV manufacturers, can underwrite a viable battery business in 12–18 months.
References
1. Ministry of Heavy Industries, Government of India — ACC-PLI scheme guidelines, FAME-II disbursements, PM E-DRIVE framework, 2024-25
2. GMI Research — India Lithium-Ion Battery Market Size and CAGR, 2026
3. NextMSC — India Battery Market Volume and Revenue CAGR analysis, 2026
4. Geological Survey of India (GSI) — Lithium Reserve Discovery Reports, Jammu & Kashmir and Rajasthan, 2023-240
