India Lithium-ion Battery Market Size & Share Analysis - Growth Trends and Forecast (2026 - 2031)

India Lithium-ion Battery Market Trends and Insights

Declining Lithium-ion Battery Cost Curve Acceleration

Battery-pack prices in India fell to USD 115 per kWh in 2025 from USD 132 per kWh a year earlier as raw-material prices cooled and domestic scale improved. By early 2026, locally produced NMC cells cost USD 95 per kWh, almost matching imported Chinese equivalents once freight and GST are added. This rapid deflation is tipping total-cost-of-ownership equations in favor of electric two- and three-wheelers, where price sensitivity is high. LFP, representing 22% of 2025 demand, offers an 18-22% bill-of-materials discount over NMC, though its energy density is roughly 15-20% lower. Cost parity is also enabling 4-hour stationary systems to undercut diesel gensets on levelized cost in commercial buildings, a milestone crossed in 2025.

Government FAME-II Subsidies and PLI Schemes

The government disbursed INR 7,500 crore (USD 900 million) in FAME-II incentives by March 2025, underwriting 1.2 million electric two-wheelers and 18,000 e-buses and slicing sticker prices by 25-30%. Extension through March 2027 locks in demand visibility, helping OEMs align with phased manufacturing mandates. Complementing demand pull, the ACC-PLI program earmarked INR 18,100 crore (USD 2.17 billion) to catalyze 50 GWh of domestic capacity by 2030. Reliance New Energy’s 10 GWh Jamnagar plant and Ola Electric’s 20 GWh Tamil Nadu gigafactory headline the beneficiaries, each capturing more than INR 2,900 crore (USD 350 million) in incentives. The 20% value-addition subsidy during the first five years compresses the landed-cost gap with imports to below 5%, galvanizing localization decisions by major OEMs.

Electric Two-Wheeler Boom in Urban Mobility

Electric two-wheelers seized 48% of all two-wheeler sales across India’s top 10 cities in 2025, up from 38% in 2024. Ola Electric, Ather Energy, and TVS Motor sold a combined 1.8 million e-scooters, each packing 2.5–4 kWh NMC batteries that deliver 100–150 km real-world range. While high-nickel cathodes fuel urban models, limited public charging in Tier-2 and Tier-3 cities still restrains inter-city adoption, underscoring infrastructure gaps highlighted by the Ministry of Power. Elevated demand for cylindrical 21700 cells mirrors the segment’s preference for thermally benign pack architectures that can be rapidly assembled at scale.

Grid-Scale Energy-Storage Tenders by SECI & NTPC

SECI awarded 4 GWh of BESS contracts in 2025 at an average tariff of INR 4.8 per kWh (USD 0.058) for two-hour LFP systems in Rajasthan and Gujarat. In January 2026, NTPC floated the nation’s first 10-year performance-linked tender covering 2 GWh, signaling a pivot from capex to lifecycle-cost metrics. Reliability clauses favor LFP cells rated for 6,000+ cycles, nudging domestic manufacturers toward iron-phosphate cathode lines. With a 12 GWh pipeline through 2027, utility bids are triggering second-life opportunities as retired EV packs are repurposed, although regulatory clarity for reuse remains nascent under the Ministry of Power.

Critical-Mineral Import Dependence

India imported 18,200 t of lithium compounds worth USD 1.2 billion in 2025, with 68% dependent on China and 24% on Chile.^{[3]Ministry of Mines, “Critical Minerals Strategy,” mines.gov.in} Cobalt shipments of 4,800 t arrived almost exclusively via Chinese refineries sourcing from the Democratic Republic of Congo, exposing a single-node risk for NMC supply. Although exploratory finds in Karnataka’s Mandya district indicate 14,100 t lithium oxide equivalent, commercial extraction is unlikely before 2028. The Critical Mineral Mission has earmarked INR 2,500 crore (USD 300 million) for overseas mine stakes, yet until operational, cell manufacturers will continue to hedge by stockpiling three-month inventories, inflating working-capital cycles.

Under-Developed Battery-Recycling Ecosystem

National recycling capacity reached only 12,000 t pa in 2025, equal to processing 8% of end-of-life packs.^{[4]Central Pollution Control Board, “Battery Waste Management Review,” cpcb.nic.in} Extended producer responsibility rules delivered just 22% compliance due to patchy enforcement, leaving informal channels to handle most returned batteries. Hydrometallurgical plants need a 25,000 t pa break-even scale, yet Attero Recycling and Lohum Cleantech together processed only 8,400 t in 2025. Lithium carbonate recovered via recycling costs USD 18 per kg, roughly 30% above virgin imports, discouraging uptake. Absence of a rural reverse-logistics network deepens the problem as 38% of electric two-wheelers now sell beyond metro areas.

Segment Analysis

By Product Type: LFP Gains on NMC’s Dominance

India's lithium-ion battery market size for NMC chemistry was USD 1.87 billion in 2025, equal to a 33.3% share. LFP's superior cycle life and cobalt-free design underpin its forecast 27.1% CAGR, propelling it to near-parity with NMC by 2031, especially in stationary storage and commercial EVs. Exide Industries and Ola Electric both aim to shift 60% of sourcing to LFP by 2027. Although NMC retains an edge in premium passenger cars demanding 400 km+ range, stricter thermal-propagation tests under AIS-156 tilt mass-market models toward LFP. Minor chemistries like LTO and LMO will remain niche, serving public buses and power tools where rapid charging and temperature resilience override energy density.

India's lithium-ion battery market share for LFP is projected to close the gap as SECI and NTPC tenders mandate iron-phosphate chemistry for safety and lifecycle reasons. Consumer-electronics OEMs still prefer high-density NMC and LCO cells, but rising smartphone battery capacities are gradually cannibalizing LCO volumes. Panasonic Energy's small NCA niche supplies luxury EVs, yet volumes stay marginal due to cost and supply-risk issues.

Note: Segment shares of all individual segments available upon report purchase

By Form Factor: Pouch Cells Challenge Cylindrical Hegemony

Cylindrical formats generated USD 3.13 billion of the India lithium-ion battery market size in 2025, equal to 55.8% share, reflecting deep legacy supply chains and automated assembly lines. The 21700 cell, widely used by Ather and Ola, delivers 35% more energy than 18650, lowering per-kWh pack cost by 8–10%. Pouch cells, while only 16.2% share now, are forecast to grow 24.3% CAGR as skateboard EV platforms demand thin, high-utilization modules. LG Energy Solution’s 5 GWh Pune plant, due in 2026, will feed this trend with 250 Wh/kg NMC pouches.

Thermal-expansion risks in India’s 45 °C summers necessitate enhanced cooling, adding USD 20-30 per kWh to pouch-pack costs, but weight savings of 12-18% are compelling for two-wheeler OEMs chasing sub-100 kg designs. Prismatic cells dominate stationary storage as they simplify racking and BMS integration, despite an 8–12% cost premium. BYD’s blade battery technology is under evaluation by Indian bus OEMs for structural integration benefits.

By Power Capacity: Large-Format Cells Accelerate

Cells up to 3,000 mAh held 40.1% of India's lithium-ion battery market share in 2025, thanks to the 180 million smartphones shipped every year. Larger above-60,000 mAh formats will post a 28.5% CAGR through 2031 as OEMs shift to large prismatic modules that lower assembly labor by nearly one-third. Exide's 12 GWh Bengaluru plant will prioritize these large-format cells, aligning with the phased manufacturing requirement for 60% domestic value addition by 2027.

Mid-range 10,000–60,000 mAh cells, used in e-rickshaws and light commercial vehicles, face price pressure from Chinese imports that undercut domestic offers by 15–20% even after the GST differential. As carmakers migrate to 100,000 mAh modules, economies of scale in coating and formation are expected to trim per-kWh costs by another 15% by 2028.

Note: Segment shares of all individual segments available upon report purchase

By End-Use Industry: Automotive Overtakes Consumer Electronics

Consumer electronics consumed 35.5% of shipments in 2025, but automotive demand is set to dominate by 2029, expanding at a 25.9% CAGR as two-wheeler electrification spreads from Tier-1 cities to peri-urban districts. Passenger EV sales tripled to 120,000 units in 2025, each carrying 30–50 kWh packs that dwarf phone batteries in material terms. The India lithium-ion battery market size for stationary storage reached USD 1.01 billion in 2025 and is the fastest-growing non-mobility application thanks to tender-led visibility.

Industrial power tools, at 12% share, continue migrating from nickel-cadmium to lithium-ion as OEMs chase 40% weight savings. Aerospace and defense volumes remain niche but lucrative, with Bharat Electronics shipping LTO packs that meet MIL-STD-810 vibration requirements. Marine applications such as Kerala’s 500 kWh ferry demonstrate untapped potential as inland waterways modernize.

Geography Analysis

Tamil Nadu, Gujarat, and Maharashtra together host 72% of announced cell capacity, underpinning regional specialization within the India lithium-ion battery market. Tamil Nadu’s Krishnagiri district houses Ola Electric’s 20 GWh gigafactory, backed by a 15% capital subsidy capped at INR 150 crore. Proximity to Chennai and Bengaluru EV assembly plants and streamlined port logistics shorten raw-material lead times. Gujarat’s Jamnagar cluster, led by Reliance New Energy’s 10 GWh project, benefits from renewable-energy surpluses that shave formation-stage electricity costs by up to 20%.

Maharashtra leverages industrial infrastructure and skilled labor, anchoring Exide’s 12 GWh Chakan site and Amara Raja’s 16 GWh Pune plan, both eligible for state-level fiscal incentives. Karnataka is carving a recycling and second-life niche, with Attero Recycling’s 18,000 t pa hydrometallurgical plant in Bengaluru reclaiming 92-95% of metals from spent packs. Rajasthan and Gujarat dominate grid-scale storage demand, hosting 68% of SECI-awarded BESS capacity, thanks to high solar output and network congestion. The diffusion of electric two-wheelers into Tier-2 and Tier-3 cities creates logistics challenges for battery-swapping networks, a gap Sun Mobility addresses via 9 kWh LFP swap stations now spanning eight cities.