India’s Lithium Batteries Cost 23% More Than China’s

India’s lithium-ion battery industry continues to face a significant cost disadvantage compared with China, with locally manufactured battery cells and related products estimated to be around 23% more expensive than Chinese imports. The cost gap highlights one of the central challenges confronting India’s push to build a domestic battery manufacturing ecosystem: while the country is rapidly expanding electric-vehicle and energy-storage demand, Chinese manufacturers continue to benefit from enormous production scale, established supply chains and lower input costs.

The pricing disadvantage is particularly important because batteries are among the most expensive components of an electric vehicle. India has made progress in assembling battery packs domestically, but cell manufacturing and upstream materials remain less developed. China continues to dominate India’s lithium-ion battery supply, accounting for roughly 75% of India’s lithium-ion cell and battery imports in FY2024, while recent import data show that the value of lithium-ion units sourced from China has continued to rise sharply.

India-China Lithium Battery Cost Gap At A Glance

Particular	Details
India’s cost disadvantage	~23% above China
Major competing market	China
China’s share of India’s Li-ion imports, FY2024	~75%
India’s lithium-ion import value, FY2025-26	~$4.7 billion
Domestic cell manufacturing	Still at an early stage
Major cost advantage for China	Scale + integrated supply chain
Key Indian challenge	Localizing cells and materials
Battery demand driver	EVs + energy storage
Government focus	Domestic cell and component manufacturing

The precise 23% figure represents the cost gap highlighted in the source report; industry estimates have also placed India’s initial cell-production premium in a broadly similar range of 20-25% compared with China.

Why Indian Lithium Batteries Cost More

The biggest reason is scale.

China has spent decades building an integrated battery ecosystem covering raw materials, chemical processing, cathode and anode materials, cell manufacturing, equipment and battery-pack production.

India is attempting to build many of these capabilities simultaneously.

China

Raw Materials
     ↓
Processing
     ↓
Cathode / Anode Materials
     ↓
Cell Manufacturing
     ↓
Battery Packs
     ↓
EV / Energy Storage


India

Imported Materials / Cells
     ↓
Domestic Pack Assembly
     ↓
EV / Energy Storage

        ↓
Domestic Cell Manufacturing Still Scaling

The difference in ecosystem maturity translates into higher manufacturing costs for Indian producers.

China Has A Major Scale Advantage

Chinese battery manufacturers operate enormous production facilities and benefit from large domestic and export markets.

Higher production volumes allow manufacturers to spread fixed costs across more battery cells.

Indian manufacturers, by comparison, are still establishing their gigafactories.

Industry executives at Amara Raja have estimated that Indian-made cells could initially carry a 20-25% premium over comparable Chinese products before economies of scale and localization narrow the difference.

Major Sources Of The Cost Gap

Cost Factor	China	India
Manufacturing scale	Very high	Developing
Battery-material ecosystem	Highly integrated	Developing
Cell production	Mature	Early-stage
Equipment availability	Extensive	More import-dependent
Supplier network	Deep	Expanding
Domestic demand	Very large	Rapidly growing
Production cost	Lower	Higher

Battery Cells Are The Biggest Cost Component

For lithium-ion battery packs, the cell is generally the most expensive component.

An earlier industry assessment cited by JMK Research estimated that cells account for approximately 65% of total lithium-ion battery cost, while battery-pack assembly accounts for around 15%, battery-management systems around 15% and the outer casing for the remainder.

Approximate Battery Cost Structure

Battery Cell          ~65%
Battery Pack           ~15%
Battery Management     ~15%
Outer Box / Others      ~5%
----------------------------
Total                  100%

This explains why simply assembling battery packs in India does not eliminate the country’s dependence on China.

The more difficult challenge is producing the cell itself competitively.

India Is Still Heavily Dependent On Chinese Cells

India’s lithium-ion battery supply chain remains heavily connected to China.

According to data cited by JMK Research, China accounted for around 75% of India’s lithium-ion cell and battery imports in FY2024. Hong Kong, South Korea, Vietnam and Singapore were among the other major sources.

India’s Lithium-Ion Import Sources

Country/Region	Approximate Share, FY2024
China	75.0%
Hong Kong	9.9%
South Korea	Part of remaining share
Vietnam	2.7%
Singapore	1.0%
Others	Remaining

The concentration of imports makes battery costs sensitive to changes in Chinese production, logistics, trade policy and geopolitical conditions.

India’s Battery Imports Are Rising

The dependence has not yet declined despite India’s efforts to localize production.

India imported approximately $1.433 billion of lithium-ion units from China during the first three months of 2026, compared with $774.28 million in the corresponding period a year earlier.

That represented an increase of approximately 85%.

Overall imports of these products rose from around $946 million to $1.66 billion during the same period.

Lithium-Ion Import Growth

Period	Imports From China	India’s Total Imports
Q1 2025	$774.28 million	$946 million
Q1 2026	$1.433 billion	$1.660 billion
YoY change	~85%	~75%

The numbers suggest that demand for lithium-ion batteries is growing faster than India’s domestic cell-production capacity.

India’s EV Growth Is Increasing Battery Demand

Electric vehicles are the biggest structural driver behind the country’s growing battery requirements.

As EV adoption expands across:

• Two-wheelers
• Three-wheelers
• Passenger cars
• Commercial vehicles
• Buses

battery demand rises correspondingly.

Energy-storage systems are another major source of demand as India expands renewable-energy capacity.

This creates a significant opportunity for domestic battery manufacturers, but it also increases the near-term requirement for imported cells.

Battery Demand Could Rise Dramatically

The Institute for Energy Economics and Financial Analysis estimates that India’s advanced-chemistry-cell demand could rise from around 28 GWh in 2025 to approximately 272 GWh by FY2030.

That represents a potential increase of more than nine times in five years.

India’s Projected Battery Demand

Year	Estimated ACC Demand
2025	~28 GWh
FY2030	~272 GWh
Increase	~9.7x

Such growth means India cannot rely indefinitely on imported cells without creating a large strategic and economic vulnerability.

Domestic Cell Manufacturing Is Still Catching Up

India’s battery industry has made more progress in pack assembly than in cell manufacturing.

According to IEEFA, India’s domestic battery-cell manufacturing capacity was only around 1 GWh at the end of 2025, compared with approximately 60 GWh of installed capacity for battery-pack manufacturing.

That gap explains why domestic battery companies can assemble packs while continuing to depend heavily on imported cells.

India’s Battery Manufacturing Position

Segment	Approximate Capacity
Battery-pack manufacturing	~60 GWh
Cell manufacturing	~1 GWh
FY2030 projected ACC demand	~272 GWh

The numbers show how large the domestic manufacturing opportunity remains.

India Has A Long Way To Go On Battery Materials

Cell manufacturing is only one part of the supply chain.

India also needs to develop domestic capabilities in:

• Cathode materials
• Anode materials
• Electrolytes
• Separators
• Graphite
• Lithium processing
• Nickel processing
• Cobalt supply
• Manufacturing equipment

China’s advantage extends across many of these areas.

The result is that even an Indian factory can remain exposed to Chinese supply chains if it imports key materials or machinery.

Manufacturing Equipment Is Another Weakness

Indian battery companies also depend substantially on imported manufacturing machinery.

Industry executives have pointed out that China currently offers battery-manufacturing equipment at greater scale and often with shorter lead times than alternatives from Japan or South Korea.

This creates another layer of cost pressure.

Imported Equipment
        +
Imported Materials
        +
Lower Production Scale
        ↓
Higher Indian Cell Cost
        ↓
~20-25% China Premium

Localizing equipment and materials could therefore be as important as building the cell factories themselves.

Government Is Trying To Reduce The Cost Gap

New Delhi has introduced several policies to encourage domestic battery manufacturing.

The Advanced Chemistry Cell Production Linked Incentive scheme was designed to establish large-scale domestic cell manufacturing capacity.

The government also recently expanded customs-duty exemptions for machinery used to manufacture lithium-ion cells.

In July 2026, the Centre extended nil customs duty on a broader range of lithium-ion cell manufacturing machinery until March 31, 2029.

Recent Policy Support

Policy Measure	Objective
ACC PLI scheme	Encourage domestic cell production
Customs-duty exemption	Lower equipment costs
Battery-material investments	Build local supply chain
EV policies	Increase domestic demand
Energy-storage policies	Create large-scale demand
Manufacturing incentives	Encourage localization

The policy objective is to make domestic production increasingly competitive over time.

Customs Duty Relief Could Narrow The Gap

The government’s decision to remove customs duties on lithium-ion cell manufacturing machinery could lower the initial capital cost of Indian factories.

The machinery covered includes:

• Coating machines
• Winding machines
• Welding systems
• Formation equipment
• Drying systems
• Testing equipment

The exemption applies through March 31, 2029.

Lower equipment costs could improve the economics of domestic cell manufacturing.

Scale Could Eventually Reduce India’s Premium

Indian battery companies do not expect the cost gap to remain permanently at current levels.

As production expands, companies can benefit from:

• Economies of scale
• Better equipment utilization
• Local suppliers
• Lower logistics costs
• Domestic materials
• Process improvements
• Higher factory utilization

The industry therefore expects the initial cost premium to narrow over time.

Path To Cost Competitiveness

More Factories
      ↓
Higher Production
      ↓
Supplier Localization
      ↓
Lower Input Costs
      ↓
Better Factory Utilization
      ↓
Economies Of Scale
      ↓
Smaller China Cost Gap

The process could take several years.

The China Premium Could Affect EV Prices

Battery costs have a direct relationship with EV economics.

If an Indian-made cell costs 20-25% more than an imported Chinese equivalent, manufacturers may face difficult choices.

They could:

1. Absorb the additional cost.
2. Pass it to consumers.
3. Reduce margins.
4. Use imported cells until domestic prices become competitive.

The choice could influence the pricing of electric vehicles and energy-storage products.

Battery Cost Is Critical For EV Competitiveness

For EV manufacturers, battery economics affect:

• Vehicle price
• Gross margin
• Range
• Charging performance
• Product competitiveness
• Total cost of ownership

A persistent battery cost premium could therefore slow the pace at which Indian EV manufacturers achieve price parity with conventional vehicles.

At the same time, domestic cell manufacturing could eventually give manufacturers greater control over battery technology and supply.

Energy Storage Creates Another Opportunity

The battery opportunity extends beyond electric vehicles.

India’s growing renewable-energy sector needs large-scale storage systems to balance intermittent solar and wind generation.

This could create significant domestic demand for battery cells.

Industry executives expect government procurement and localization requirements in energy storage to potentially support domestic cell manufacturers.

That demand could help Indian factories reach the scale required to lower costs.

India’s Strategic Goal Is Bigger Than Cost

The government is not pursuing domestic battery manufacturing only to produce cheaper batteries.

There is also a strategic objective.

Heavy reliance on imported cells and critical minerals creates vulnerability to:

• Supply disruptions
• Geopolitical tensions
• Export restrictions
• Currency movements
• Shipping costs
• Commodity-price volatility

The Indian government has itself acknowledged that the country’s current dependence on imported lithium and battery materials creates supply-chain vulnerability.

China Remains Difficult To Replace Quickly

China’s position cannot be replicated simply by building a few Indian gigafactories.

The country’s advantage comes from a deeply integrated ecosystem developed over decades.

Chinese Advantage

Mining / Imports
      ↓
Refining
      ↓
Materials
      ↓
Equipment
      ↓
Cells
      ↓
Packs
      ↓
EVs
      ↓
Exports

India is still building several of these layers.

That is why the 23% cost disadvantage should be viewed as an ecosystem problem rather than simply a factory-efficiency problem.

Indian Companies Are Investing In The Ecosystem

Companies such as Amara Raja and Exide Industries are investing in domestic lithium-ion cell manufacturing.

Amara Raja has said it expects locally produced cells to initially carry a 20-25% premium but believes the gap can narrow as India’s supply chain develops.

Other companies are also investing in battery materials, pack manufacturing and related technologies.

The development of multiple suppliers should gradually reduce India’s dependence on imported components.

The Bigger Picture

India’s lithium-ion battery industry is caught between rapidly increasing domestic demand and a significant cost disadvantage compared with China. The reported 23% premium illustrates the difficulty of competing with a Chinese ecosystem that has enormous manufacturing scale, established material suppliers and mature battery-equipment capabilities. China already accounts for roughly 75% of India’s lithium-ion battery imports, while India’s cell manufacturing capacity remains far below its expected future demand.

The cost gap also explains why India’s battery strategy cannot stop at assembling battery packs. The country needs to build a complete value chain covering cells, materials, equipment and critical minerals. Government measures such as the ACC PLI program and customs-duty exemptions for cell-manufacturing machinery are intended to accelerate that transition. But with advanced-chemistry-cell demand potentially rising from 28 GWh in 2025 to 272 GWh by FY2030, domestic capacity will need to expand dramatically if India is to reduce its dependence on Chinese imports.

Looking Ahead

The next phase of India’s battery industry will be defined by whether domestic manufacturers can close the cost gap while scaling production. Larger factories, greater localization of battery materials, lower equipment costs and stronger domestic demand could gradually reduce the current 20-25% premium. The government’s customs-duty relief through 2029 should also provide manufacturers with greater certainty as they invest in cell-production infrastructure.

For India’s EV and energy-storage industries, however, cost competitiveness will remain critical. Imported Chinese cells are currently difficult to replace because of their scale and integrated supply chain, even as India seeks greater strategic independence. If Indian manufacturers can successfully build a domestic cell ecosystem, the country could eventually reduce its import bill, strengthen supply-chain resilience and create a more competitive foundation for its electric-mobility and renewable-energy ambitions