For several years, the battery conversation in India has been closely linked to electric vehicles. That was expected. EVs created a large new market for lithium-ion batteries, brought battery manufacturing into sharper focus and accelerated investment across the value chain.
But the next phase of battery growth is unlikely to come from mobility alone.
India is adding renewable-energy capacity at a rapid pace. As solar and wind become a larger part of the power mix, the challenge is no longer only about generating electricity. It is also about storing it and making it available when and where it is needed.
That is where the battery opportunity starts to become much larger.
Storage could become the next major growth engine
Energy storage is likely to be one of the strongest drivers of battery demand in the coming years. The National Electricity Plan (Generation) projects a BESS requirement of 47.24 GW/236 GWh by 2031–32, with an estimated investment of about ₹3.49 lakh crore.
These are significant numbers, but the more important point is what they represent.
Renewable power does not always match the timing of electricity demand. Solar generation, for example, is concentrated during daylight hours, while electricity consumption continues into the evening. Storage can help bridge that gap.
At the grid level, batteries can provide flexibility and help manage peak demand. For commercial and industrial users, they can support backup power and power-quality requirements. As data centres, telecom networks and other power-intensive infrastructure expand, reliable storage will become increasingly relevant.
This makes batteries an infrastructure requirement, not just an automotive component.
The demand base is becoming more diverse
EVs will remain an important source of battery demand. At the same time, the market is becoming much broader.
BESS, telecom, UPS, industrial backup, solar-plus-storage and other distributed-energy applications are creating additional demand. Each of these applications comes with different technical and commercial requirements.
A battery designed for an electric two-wheeler has a very different operating profile from one used for grid storage. Similarly, a telecom or industrial application may place greater emphasis on reliability, operating life and serviceability.
This means the battery industry will increasingly have to become application-focused.
Scale will matter, but scale by itself will not be enough. Performance, safety, consistency and lifecycle economics will become equally important as customers become more informed and storage moves into critical applications.
Manufacturing depth will matter more than headline capacity
India’s battery opportunity should not be measured only by the number of gigawatt-hours of manufacturing capacity being announced. The bigger question is how much of the value chain can be developed within the country.
Cells are an important part of the ecosystem, but they are not the entire ecosystem. Battery management systems, electronics, thermal management, pack engineering, testing, quality control, recycling and software will all play a larger role as the industry matures.
India has already taken steps in this direction through the Production Linked Incentive scheme for Advanced Chemistry Cell (ACC) battery manufacturing, with an outlay of ₹18,100 crore to establish 50 GWh of domestic ACC manufacturing capacity. The government has also stated that 40 GWh of the targeted 50 GWh capacity has been awarded to four beneficiary firms.
The next challenge is to build the ecosystem around this capacity. That means developing reliable supply chains, skilled talent, technology capabilities and stronger domestic expertise in battery engineering and testing. Localisation should not simply mean assembling more battery packs. It should mean building deeper capabilities across the value chain.
Battery growth will increasingly be linked to renewable energy
India’s energy transition is creating a structural need for storage.
Solar and wind generation are variable by nature. As their contribution to the electricity system increases, flexibility becomes more valuable. Storage can help manage this variability and make renewable power more usable across different periods of the day.
The policy environment is moving in the same direction. The government has introduced a National Framework for Promotion of Energy Storage Systems, guidelines for BESS procurement and other measures to support storage deployment. It has also provided viability gap funding for BESS capacity and introduced measures such as transmission-charge waivers.
Storage is increasingly being treated as part of the power infrastructure rather than as a standalone technology. That shift will have a direct impact on future battery demand.
Safety and lifecycle economics will become decisive
As batteries move into larger and more critical applications, the lowest upfront price cannot remain the only consideration.
Safety, thermal management, degradation, cycle life, serviceability and total lifecycle cost will become much more important in purchasing decisions.
A battery that is cheaper at the time of purchase but requires earlier replacement or delivers inconsistent performance may not be cheaper over its operating life.
This is also why testing and quality control need to become central to battery manufacturing.
Reliability cannot be something that is checked only at the end of the production line. It has to be considered from cell selection and pack design to battery-management systems, manufacturing processes and monitoring after deployment.
Recycling will become an important part of the battery ecosystem
The next phase of battery growth also needs to be more circular.
India’s Battery Waste Management Rules, 2022 establish Extended Producer Responsibility requirements for producers and provide for collection, recycling and refurbishment of waste batteries through the regulatory framework. The Central Pollution Control Board's battery EPR system provides for registration of producers, recyclers and refurbishers and the use of EPR certificates.
This is important for both environmental and economic reasons. Batteries contain materials that retain value after their first life. Recovering these materials and bringing them back into the manufacturing cycle can reduce dependence on virgin resources and strengthen supply-chain resilience.
Over time, recycling should become an integral part of how the battery industry operates rather than an activity considered only at the end of a product’s life.
The next cycle will be bigger than the EV cycle
India’s battery opportunity is moving beyond mobility and into the broader energy system. EVs will remain an important source of demand, but renewable integration, grid flexibility, industrial power requirements, data centres, telecom and distributed storage can significantly widen the market.
Capturing this opportunity will require more than manufacturing scale. It will require capabilities across technology, safety, testing, battery management, recycling and lifecycle management. The companies that can combine scale with reliability and application-specific performance will be better positioned as the market matures.
The next battery growth cycle, therefore, will not be defined by how many batteries India can manufacture alone. It will be defined by how effectively those batteries can support a more renewable, reliable and flexible energy system.
Pratik Kamdar is the Co-Founder & CEO of Neuron Energy. All views expressed are the author's own.