India's booming EV sector faces a critical challenge in 2026: fragmented battery recycling threatens sustainability goals. Strategic EPR partnerships and circular supply chains must replace informal waste systems to secure materials and competitiveness.
27 Dec 2025 | 4970 Views | By Avnish Bagaria, NavPrakriti
The electric mobility sector in India is at a tipping point. It started with a policy-forced transition to cut down oil imports and air pollution in cities, but now it has transformed into a complete industrial shift. The sale of electric vehicles has increased exponentially in the past couple of ...
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The electric mobility sector in India is at a tipping point. It started with a policy-forced transition to cut down oil imports and air pollution in cities, but now it has transformed into a complete industrial shift. The sale of electric vehicles has increased exponentially in the past couple of years because of government support, localization norms, and customer acceptance.
India plans to see 30% adoption of electric cars, 70% adoption in commercial cars, and close to complete adoption in two/three-wheelers by the end of this decade, which is driving battery ecosystem growth in India at an unprecedented pace. Despite this success, a challenge lurking beneath the surface threatens to emerge in 2026: the lithium-ion battery value chain remains fragmented, especially in the end-of-life stage. This fragmentation is poised to become a weak link that could undermine the clean mobility mission.
The Intent Is Clear — the Execution Lags
The government has been proactive in recognizing the implications of this threat. The Battery Waste Management Rules, along with the enhancement of Extended Producer Responsibility (EPR), indicate a clear intent: batteries should not be treated in a linear fashion. Batteries are meant to be tracked, recycled, and cycled back into the economy. However, policy intent alone cannot guarantee successful implementation. The forthcoming years promise stricter controls, increased reporting requirements, and a strengthened traceability regime. This is not a threat to the industry, but rather a call to professionalize and future-proof battery value chains.
The Scale of Battery Waste Will Redefine the Industry
The need is not theoretical. Industry projections indicate that waste from lithium-ion batteries in India is set to grow nearly sixfold by 2030, as EVs, consumer electronics, and storage systems approach the end of their life. In the mid-2030s, this is set to grow exponentially as current EVs reach the end of their life. Every discarded battery is more than just waste; it is a rich source of vital commodities such as lithium, cobalt, nickel, manganese, aluminum, and copper, which India currently imports. In a world characterized by supply chain uncertainties, domestically sourcing such commodities has evolved from a choice to a necessity.
Fragmented Supply Chains Pose Hidden Risks to the Economy and the Environment:
Supply chain fragmentation increases risks on both economic and environmental fronts. Presently, used batteries are recycled through informal, disorganized channels that are not traceable, safe, or environmentally sound. For producers, this results in a quiet degradation of value. Recoverable materials escape from the formal economy, proving compliance becomes harder, and reputational damage becomes a threat as sustainability claims come under increased scrutiny from government, investors, and consumers. Over the long run, fragmented systems also pose increased fire, logistical, and insurance risks, which affect the bottom line.
EPR Partnerships Can Be Strategic Assets
This is where robust, structured EPR partnerships are essential. Extended Producer Responsibility should not be considered merely a regulatory requirement but as a strategic tool for the industry. By involving OEMs, battery producers, recyclers, and refurbishers, Extended Producer Responsibility becomes a tool for ensuring supply security.
Such collaboration facilitates predictable recovery volumes, guaranteed recycling rates, and quantifiable recovery rates. It has the potential to enable routes to refurbishment and secondary uses, so that batteries spent in mobility applications can still contribute to stationary energy storage, telecommunication power backup, or renewable energy support.
Government Enablement Is Strong – Industry Must Lead
The government's facilitation of this environment has been, on the whole, constructive. The digitization of EPR portals, the definition of accountability, and the metrics that need to be met to be considered 'in compliance' have largely clarified ambiguities. It is the responsibility of producers to invest in developing collection infrastructure in the country, assist the informal sector in becoming legitimate, and shift from short-term to long-term recycling partnerships. Long-term relationships will bring scalability, sustainability, and viability.
Regional Capacity Will Define India’s Circular Economy Success
Battery waste in India will not be generated in major metropolitan cities alone. Tier 2 and Tier 3 cities, logistics hubs, and upcoming EV hubs, especially in the eastern and central parts of India, will also contribute substantially. Having regionally based recycling and refurbishing facilities, with the support of OEM agreements, helps minimize transportation risks, increase employee safety, reduce turnaround times, and provide green employment.
Circular Supply Chains Offer a Global Competitive Advantage
In addition to meeting local obligations, there is a significant international component. OEMs are now being judged on ESG factors, supply chain transparency, and circularity. International markets are increasingly demanding assurance of recycled content. This is particularly relevant for Indian manufacturers who will need to invest in a structured implementation of Extended Producer Responsibility (EPR). The concept of circular supply chains is rapidly becoming a reality. The earlier that OEMs, recyclers, and policymakers come together, the sooner systems development, safety, and unit economics can mature. Fragmentation of the value stream increases waiting times for returns, operational risks, and consequently, costs for all parties.
2026: The Time To Institutionalize Circularity
The battery industry in India is at a critical juncture. The government has established a robust foundation. Demand-side growth is strong and irreversible, and the only area that needs a deliberate shift is the incorporation of end-of-life solutions. The solution to fragmentation is not merely a waste management problem but a matter of enhancing system resilience. Industry can leverage this pivotal moment to shift India's clean energy transition from electrification to a leading role in the global execution of clean, circular, and environmentally responsible practices in battery manufacturing.
Avnish Bagaria is the co-founder of NavPrakriti. Views expressed are the author's personal.