India’s EV Economy Could Support 21.7 Million Jobs by 2040: ICCT

India’s electric vehicle economy could support 21.7 million direct and indirect jobs by 2040 under an ambitious electrification pathway, according to a study by the International Council on Clean Transportation.

The transition, however, could result in a net loss of direct manufacturing employment if battery cells continue to be imported. The study found that the employment impact turns positive once domestic battery localisation exceeds 25%.

Under the ICCT’s Aligned with Viksit Bharat scenario, direct employment in EV and component manufacturing is projected to increase from about 90,000 jobs in 2024 to 4.3 million by 2040, assuming negligible domestic battery-cell production.

Full localisation of battery manufacturing could increase direct employment to 7.2 million jobs. EV production could also support 17.3 million indirect jobs across logistics, trade, finance, professional services and other parts of the supply chain.

The 21.7 million estimate covers direct and indirect employment supported by EV manufacturing. It does not represent net new jobs created by the transition.

Battery Localisation Is Key to India's EV Job Creation

Without domestic battery-cell production, the net direct employment impact remains negative across all three electrification scenarios assessed by the ICCT.

Under the Aligned with Viksit Bharat scenario, the net impact in 2040 is estimated at a loss of about 800,000 direct jobs without battery localisation. At 50% localisation, this turns into a gain of about 600,000 jobs. Complete localisation could raise the net gain to more than 2 million jobs.

Under the Industry Commitment scenario, the net impact is estimated at a loss of about 700,000 jobs without cell localisation. Full localisation could turn this into a net gain of around 1.7 million jobs.

Even under the more gradual business-as-usual scenario, complete battery localisation could result in a net increase of about 600,000 direct jobs by 2040.

The ICCT estimates that around 40% of existing jobs in internal-combustion-engine manufacturing could be transferred to EV production. These include roles in body and chassis production, paint shops and final assembly.

The remaining 60%, largely associated with engines, transmissions, fuel-injection systems and other conventional powertrain components, would be exposed to the transition and may require reskilling or redeployment.

Employees in assembly, body shops, paint operations and sales may be able to move into EV-related roles with limited upskilling. Workers associated with engines, transmissions and other ICE-specific systems are likely to require more extensive retraining.

The report identified high-voltage systems, battery engineering, power electronics, electric drivetrains, embedded software, data analytics and charging infrastructure as priority areas for workforce development.

India's EV Production Could Generate $620 Billion in Economic Output

The study examined three pathways based on different levels of fuel-efficiency regulation and EV adoption.

Under the business-as-usual pathway, battery-electric vehicles are projected to account for about 30% of new-vehicle sales by 2040. EV production is estimated at 17.4 million units, generating economic output of $172.1 billion and supporting 1.2 million direct jobs.

The Industry Commitment pathway assumes 100% battery-electric sales for passenger cars and two-wheelers by 2040. Production is estimated at 31.4 million EVs, with output of $506.1 billion and direct employment of 3.5 million.

The Aligned with Viksit Bharat pathway envisages near-complete electrification across most vehicle categories. It projects production of 32.1 million EVs, economic output of $620.5 billion and 4.3 million direct jobs before accounting for additional employment from battery-cell localisation.

These are modelled estimates based on different assumptions for regulations, investment and EV adoption.

India Has Just 1.4 GWh of Battery Cell Manufacturing Capacity

As of June 2026, India had about 1.4 GWh of operational battery-cell manufacturing capacity, commissioned by Ola Cell Technologies, according to the report. This would meet less than 3% of projected battery demand in 2032 under each of the three scenarios.

The report estimates a potential manufacturing pipeline of about 128 GWh. This comprises the original 50 GWh target under the Advanced Chemistry Cell battery production-linked incentive scheme and approximately 78 GWh of other announced projects. Only 40 GWh of the original PLI target has been awarded.

If the entire potential pipeline is commissioned, it would be sufficient to exceed 30% localisation by 2032 under all three pathways.

By 2040, the same capacity would deliver 77% localisation under the business-as-usual scenario, 30% under the Industry Commitment pathway and 27% under the Aligned with Viksit Bharat pathway.

Reaching 50% localisation by 2040 would require another 87 GWh of manufacturing capacity under the Industry Commitment scenario and 112 GWh under the Aligned with Viksit Bharat pathway.

Battery demand by 2040 is estimated at 166 GWh under the business-as-usual scenario, 429 GWh under the Industry Commitment pathway and 480 GWh under the Aligned with Viksit Bharat scenario.

The ICCT recommended targeting at least 30% battery localisation by 2032 and 50% by 2040, alongside faster implementation of the ACC battery PLI scheme and wider policy support for battery materials, recycling, research and workforce training.

Key Findings:

• Strong economic growth: EV-related economic output could increase from USD 12.8 billion in 2024 to USD 620 billion by 2040 under the Viksit Bharat scenario
• Direct EV manufacturing employment could reach 4.3 million jobs by 2040, increasing to over 7 million with full battery localisation
• Indirect employment across logistics, materials, and services could reach 17.3 million jobs by 2040 
• Battery localisation is the tipping point: India's EV transition becomes a net creator of jobs only when battery localisation exceeds 25% 
• Battery manufacturing gap. Current capacity of 1.4 GWH meets less than 3% of projected 2032 demand; achieving 50% localisation by 2040 requires an additional 87-112 GWh of capacity

With inputs from Ketan Thakkar.