Subscribe
India’s battery manufacturing initiative under the ACC PLI scheme has achieved only 2.8% of its target.
Despite initial investment promises, actual progress is slow, with only Ola Electric commissioning capacity.
The scheme's objectives remain largely unmet, with no incentives disbursed and job creation far below expectations.
India’s flagship incentive programme to build domestic battery manufacturing has delivered just 2.8 per cent of its targeted capacity, highlighting deep structural and policy bottlenecks in the country’s clean mobility supply chain, according to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA) South Asia and JMK Research.
The Advanced Chemistry Cell (ACC) Production Linked Incentive (PLI) scheme, launched in October 2021 with an outlay of Rs 18,100 crore, aimed to set up 50 gigawatt hour (GWh) of battery cell manufacturing capacity by 2025. However, as of October 2025, only 1.4 GWh has been commissioned within the stipulated timeline — entirely by Ola Electric, the researchers found.
“Although strong policy support led to substantial investment announcements and capacity plans outside the ACC PLI scheme, on-ground progress remained sluggish,” said Prabhakar Sharma, senior consultant at JMK Research and co-author of the report.
“With India’s dependence on imported battery cells still close to 100 per cent, the scheme’s original objectives remain largely unfulfilled.”
Of the 40 GWh capacity allocated so far, Reliance New Energy is the only beneficiary that has indicated it will commission its 10 GWh capacity awarded in the second auction on time. Ola Electric, which was allotted 20 GWh in the first round, has now scaled back its plans and intends to install only 5 GWh by the 2028-29 financial year or FY29, diluting the scheme’s near-term manufacturing goals.
The report showed that no incentives have been disbursed so far against the targeted Rs 29 billion, reflecting delays in commissioning and compliance with scheme conditions.
Beneficiaries face penalties for delays, including a 0.1 per cent daily deduction of performance security, but this has not been sufficient to offset challenges such as stringent domestic value addition norms, a compressed two-year installation timeline, and visa delays for Chinese technical experts needed to install specialised equipment.
While the first ACC PLI auction in March 2022 allocated the full 50 GWh, the subsequent withdrawal of Hyundai Global Motors from its 20 GWh allocation forced the government to re-tender capacity. In the September 2024 auction, bidders secured only 10 GWh, leaving another 10 GWh yet to be allocated.
The Union Ministry of Heavy Industries and the Union Ministry of New and Renewable Energy (MNRE) are working on the programme titled National Programme on Advanced Chemistry Cell (ACC) Battery Storage for the remaining 10 GwH capacity of the 50 GwH target, especially for grid-scale stationary storage (GSSS) applications.
As of June, the plan was to extend coverage to all sectors or all aspects of batteries like data centres, telecom towers, and power backups.
The authors of the report also flagged weaknesses in the scheme’s evaluation framework. Despite having prior experience in battery manufacturing, Exide Industries and Amara Raja failed to qualify in either auction round.
“The selection criteria placed greater weight on DVA commitments, proposed capacity and subsidy benchmarks, favouring new entrants over firms with manufacturing experience,” the researchers wrote.
The ACC PLI scheme was expected to generate 1.03 million jobs, but has so far created just 1,118 jobs — around 0.12 per cent of the target. Investments have also lagged, with Rs 2,870 crore committed so far, only 25.6 per cent of the targeted Rs 11,250 crore.
To revive momentum, the report calls for dedicated incentive schemes for critical minerals, covering both sourcing and refining, along with targeted support for cell components, equipment manufacturing and recycling.
“Improving the effectiveness of ACC PLI will require a holistic, multi-pronged strategy, including robust cell testing and certification infrastructure and development of skilled domestic talent,” said Saif Jahangir, Consultant at JMK Research and co-author.
IEEFA emphasised the need to bring global expertise into India’s battery ecosystem. “Attracting established global battery players would strengthen domestic capabilities, accelerate technology transfer and help steer the industry in the right direction,” said Vibhuti Garg, director, South Asia, IEEFA.
The report, Assessing India’s incentive scheme to enhance the battery manufacturing ecosystem, concluded that without course correction, India risks missing a critical opportunity to localise battery supply chains even as electric mobility and storage demand accelerate.