India could reduce its annual combined oil and battery import bill by up to $125 billion in 2050 by accelerating electric vehicle (EV) adoption across two wheelers, three wheelers, passenger cars, light commercial vehicles, buses and trucks, according to a new working paper.
The study by the International Council on Clean Transportation (ICCT) found that $94 billion, or about three quarters of the potential savings, would come from accelerating the pace of electrification, even if India continued to import all the battery cells it needs. A further $31 billion could be saved by moving from complete reliance on imported batteries to high domestic battery manufacturing. The difference arises because the value of oil imports avoided through electrification is an order of magnitude greater than the cost of imported batteries.
The findings come as India’s battery electric vehicle (BEV) market expands rapidly but domestic cell manufacturing remains limited. BEV sales rose from 174,000 units in financial year (FY) 2019-20 to 1.968 million in FY25, a compound annual growth rate of 62.5 per cent. Their share of new vehicle registrations increased from 1 per cent to 7 per cent over the same period.
The study models battery demand and residual petroleum consumption from 2024 to 2050 under three EV adoption pathways, Baseline, Momentum and Ambitious, and four battery manufacturing pathways, No Localization, Slow, Announced and High Localization.
Under the baseline scenario, India's combined annual oil and battery import bill reaches $153 billion in 2050 when there is no domestic battery manufacturing. Under the Momentum scenario, the bill falls to $94 billion, while under the Ambitious scenario it falls to $59 billion.
That represents a 39 per cent reduction under momentum and a 61 per cent reduction under ambitious scenarious, compared to the baseline scenario. The ICCT attributes the difference primarily to lower oil imports, which outweigh the additional expenditure on imported batteries by an order of magnitude.
Under the reference oil price case, the total import bill in the Ambitious scenario falls steadily to $59 billion in 2050 under no localisation, compared with $153 billion under the Baseline scenario.
Battery manufacturing adds a further saving. Under the High Localization pathway, the Ambitious scenario reduces the 2050 import bill to $28 billion. The difference between the no localisation and high localisation pathways is therefore about $31 billion under the Ambitious scenario.
This makes the study's distinction between electrification and localisation important. Domestic battery production reduces the cost of importing batteries, but the much larger source of savings comes from displacing petroleum consumption.
“Every electric vehicle India puts on the road reduces its dependence on imported oil, whether the batteries are manufactured domestically or imported. Accelerated EV adoption alone could cut India’s road transport import bill by 61 per cent by 2050. Coupling rapid manufacturing with domestic battery manufacturing could raise those savings to 82 per cent, equivalent to about $125 billion annually,” said Namita Singh, researcher and co-author of the study.
In the study's reference oil price case, the gap between the Baseline and Ambitious electrification scenarios is $104 billion in 2050. Under the high oil price case, that gap widens to $166 billion.
Under the high oil price scenario, the combined annual import bill reaches $216 billion in 2050 under the Baseline pathway, compared with $105 billion under Momentum and $50 billion under Ambitious. Within the Ambitious pathway, the bill ranges from $75 billion with no battery localisation to $43 billion with high localisation.
The study's reference oil price rises from $82 a barrel in 2025 to $95 a barrel in 2050, while its high oil price case assumes prices rise from $120 a barrel in 2025 to $150 a barrel by 2050.
The widening difference shows that the financial benefit of electrification is particularly sensitive to oil prices. A slower transition leaves a larger share of road transport dependent on imported petroleum and therefore exposes the import bill more directly to movements in global crude prices.
“Electric vehicles could help India cut not just emissions, but also its import bill. By 2050, faster electrification could reduce vehicle related imports by around 61 per cent, from $153 billion to $59 billion, even if batteries continue to be imported. With oil import savings far exceeding the cost of battery imports, EVs could significantly reduce India’s exposure to volatile global oil prices. Domestic battery manufacturing would strengthen this energy security benefit further,” said Sumati Kohli, researcher and co-author of the study.
Annual battery demand across all vehicle segments reaches around 340 gigawatt hours (GWh) in 2050 under the baseline scenario and around 573 GWh under both Momentum and Ambitious.
Under the baseline pathway, demand rises from 28 GWh in 2030 to about 154 GWh in 2040 and 340 GWh in 2050. Under momentum, it rises from 92 GWh in 2030 to around 412 GWh in 2040 and 573 GWh in 2050.
Domestic cell manufacturing is not expected to scale quickly enough to meet this demand in the near term. The ICCT estimated that imports will meet essentially all battery demand in 2030 across the different localisation pathways. The pathways begin to diverge from the early 2030s, with the High Localization pathway eventually supplying effectively all demand domestically by 2040 and beyond.
This leaves India facing two distinct import questions as electrification expands: how quickly petroleum consumption can be displaced, and how much of the resulting battery demand can be supplied domestically.
Under the baseline scenario, battery demand reaches 340 GWh in 2050. With no localisation, the entire requirement would be imported. Under the Announced Localization pathway, domestic manufacturing supplies about 80 per cent of demand by 2050, leaving imports of around 70 GWh. Under High Localization, domestic production effectively meets all demand.
The ICCT estimates that localisation reduces the 2050 import bill by $19 billion to $32 billion, depending on the electrification scenario. This is significantly smaller than the savings generated by moving between the different electrification pathways.
For Sushant Naik, chairman of SIAM Electric Mobility Group, and Chief Corporate Affairs Officer of Tata Motors, the localisation question extends beyond battery cells to capabilities across the wider automotive value chain.
“The auto industry has already brought imports down by around Rs 20,000 crore by manufacturing for the India market, and the technology pathway we build from here should progressively take away strategic dependency, which means building not only batteries and motors on Indian soil but the skills and design capability behind them,” Naik said at the India Clean Transportation Summit 2026.
“That is why localisation is now being assessed across the value chain rather than only at final assembly, and why the shift is from localising a product to a process,” he said.
India's existing vehicle manufacturing base gives this transition a large domestic market to work with. The country produced 23.88 million two wheelers in 2024, ranking first globally in two wheeler manufacturing, and is among the top six vehicle producers for passenger cars, light commercial vehicles, buses and trucks.
The ICCT analysis focused on import payments rather than the potential export value of a domestic EV industry. Naik said the next stage should therefore involve moving beyond domestic substitution.
India already exports close to 900,000 vehicles, he said, adding that the longer term ambition should be to develop electric vehicles for global markets.
“The definition of atmanirbharta is itself changing, from making things here to creating value here, developing the technology, materials and components and exporting them. Innovate in India and manufacture for the world, and the payoff goes well beyond emissions and energy security to creating new global champions,” Naik said.
For the import bill, however, the ICCT study found that the immediate economic lever is the speed at which petrol and diesel consumption is displaced. Domestic battery manufacturing can deepen those savings by reducing the second source of import dependence, but it does not account for most of the projected reduction.
The study also noted that battery cell demand is currently met almost entirely through imports. India ranks among the top six countries globally in overall vehicle production but 12th in BEV manufacturing, with a 1 per cent global share.
As battery demand rises from the 2030s, the extent to which India can manufacture cells and other components domestically will therefore determine how much of the EV transition's import burden remains overseas. But the ICCT's central finding is that even an EV transition built partly on imported batteries could substantially reduce India's overall oil and battery import bill because of the much larger value of petroleum imports displaced.