India’s Battery PLI Scheme Delivers Just 2.8% of Target Capacity: IEEFA Report

India’s flagship incentive programme to build domestic battery manufacturing capacity has delivered only a fraction of its intended output, with just 2.8% of the targeted capacity commissioned so far, highlighting persistent structural and implementation challenges, according to a new report. The report confirms what has been suspected widely, that the scheme has failed to ignite the kind of growth and urgency in manufacturing that many hoped to see. The reasons have been many behind this disaster, from a flawed selection process that allowed irrelevant and even firms with a vested interest in stalling to win, to higher than expected complexity in managing technology transfers from the key supplier country, China.  That explains why beyond Ola Electric and Reliance, there has been little to no progress.  

India launched the Advanced Chemistry Cell Production Linked Incentive (ACC PLI) scheme in October 2021 with an outlay of INR 181 billion ($2.08 billion) to establish 50 gigawatt hours (GWh) of battery cell manufacturing capacity by 2025 and reduce dependence on lithium-ion imports, primarily from China. However, as of October 2025, only 1.4 GWh of capacity has been commissioned within the stipulated timeline, entirely by Ola Electric, shows a joint analysis by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research.

Reliance Leads The Chart 

Of the 40 GWh allocated so far under the scheme, Reliance New Energy is the only beneficiary to indicate that its second-round allocation of 10 GWh will be commissioned on time. Ola Electric plans to commission 5 GWh by March 2026 but has scaled back its broader expansion, deferring the remaining capacity until FY2029, a move that weakens the scheme’s original ambition.

The report, Assessing India’s incentive scheme to enhance the battery manufacturing ecosystem, finds a wide gap between policy intent and on-ground outcomes. Against an estimated target of more than one million jobs, the scheme has generated just 1,118 jobs so far. Investments have also lagged, with INR 28.7 billion committed—about 26% of the targeted INR 112.5 billion. No incentives had been disbursed as of October 2025, despite a planned payout of INR 29 billion.

Multiple Bottlenecks 

Beneficiaries have faced multiple bottlenecks, including stringent domestic value addition requirements, an aggressive two-year commissioning timeline, and delays in visa approvals for Chinese technical specialists required for equipment installation. These challenges have led to delays even as penalties accrue for missed deadlines.

“Despite strong policy support and investor interest, on-ground progress has remained sluggish,” said Prabhakar Sharma, senior consultant at JMK Research and a co-author of the report. “With India still importing nearly all of its battery cells, the core objectives of the ACC PLI scheme remain largely unmet.”

The report also flags shortcomings in the evaluation framework. While the tenders attracted strong interest, only companies without prior large-scale battery manufacturing experience were selected, as scoring criteria placed greater emphasis on domestic value addition and proposed capacity rather than operational expertise.

Looking ahead, the authors call for a more holistic approach, including dedicated policies for critical mineral sourcing and refining, support for cell component manufacturing, clearer tariff safeguards, and the development of domestic testing, certification and recycling infrastructure. Attracting established global battery manufacturers, the report adds, will be critical to accelerating technology transfer and strengthening India’s battery manufacturing ecosystem.