India’s battery manufacturing incentive scheme sees minuscule delivery
India launched the Advanced Chemistry Cell Production Linked Incentive (ACC PLI) scheme in October 2021 to build domestic battery manufacturing capacity and reduce India’s reliance on imported lithium-ion cells, primarily from China. The scheme is yet to unlock battery manufacturing potential.
- Jan 22, 2026,
- Updated Jan 22, 2026 9:04 PM IST
India’s Advanced Chemistry Cell Production Linked Incentive (ACC PLI) scheme has seen commissioning of only 2.8% (1.4GWh) of the targeted 50GWh capacity within the stipulated timeline of 2025 and it was entirely by Ola Electric, said a report.
The report ‘Assessing India’s incentive scheme to enhance the battery manufacturing ecosystem’ by JMK Research, and the Institute for Energy Economics and Financial Analysis (IEEFA), of the 40GWh allocated so far under ACC PLI, Reliance New Energy is the only beneficiary that has indicated commissioning its second-round award capacity (10GWh) on time.
Ola Electric plans to commission 5GWh of its 20GWh by March 2026. However, Ola’s decision to limit its capacity to 5GWh until FY2029 dilutes the commitments the scheme envisions.
Beneficiaries have faced significant supply chain and implementation bottlenecks, such as the stringent domestic value addition (DVA) requirements, an aggressive two-year installation timeline, and visa approval delays for Chinese technical specialists needed for equipment installation, leading to delays in commissioning capacity.
India launched the Advanced Chemistry Cell Production Linked Incentive (ACC PLI) scheme in October 2021 to build domestic battery manufacturing capacity and reduce India’s reliance on imported lithium-ion cells, primarily from China. With an outlay of Rs 18,100 crore, the scheme aimed to establish 50 gigawatt hours (GWh) of advanced battery cell manufacturing capacity in India by 2025.
There is a substantial gap between the intended and actual outcomes of the ACC PLI scheme. Against an estimated 10.3 lakh jobs, it has generated only 1,118 jobs (0.12% of the target). Investment levels have also lagged, with around Rs 2,870 crore committed so far, accounting for 25.58% of the targeted Rs 11,250 crore ($1.29 billion).
“Although strong policy support led to substantial investment announcements and capacity plans outside the ACC PLI scheme, on-ground progress remained sluggish. For beneficiaries, the Centre has imposed a penalty of 0.1% of the performance security for each day of delay in commissioning. Moreover, with India’s dependence on imported battery cells still close to 100%, the scheme’s original objectives remain largely unfulfilled,” says Prabhakar Sharma, senior consultant, JMK Research, and a co-author of the report.
While the ACC PLI tenders attracted overwhelming interest, capacity allocation remains incomplete. The MHI initially allocated the full 50GWh in the first auction held in March 2022, but Hyundai Global Motors’ withdrawal from its 20GWh allocation prompted a second auction. In the September 2024 round, bidders secured only 10GWh.
The government plans to tender the remaining 10GWh at a later stage. As of October 2025, no incentives have been disbursed against the targeted Rs 2,900 crore.
The report also highlights gaps in the scheme’s evaluation framework. Among all bidders across both auction rounds, only Exide Industries and Amara Raja had prior experience in battery manufacturing, yet neither qualified. The evaluation criteria placed greater emphasis on domestic value addition (DVA), proposed capacity, and subsidy benchmarks, where new entrants scored higher, resulting in the selection of firms without prior expertise.
“Going forward, improving the effectiveness of ACC PLI will require a holistic, multi-pronged strategy. This would include introducing robust cell testing and certification infrastructure; scaling up equipment manufacturing, and recycling; and developing skilled domestic talent, among other things,” says the report’s co-author Saif Jahangir, consultant, JMK Research and Analytics.
India’s Advanced Chemistry Cell Production Linked Incentive (ACC PLI) scheme has seen commissioning of only 2.8% (1.4GWh) of the targeted 50GWh capacity within the stipulated timeline of 2025 and it was entirely by Ola Electric, said a report.
The report ‘Assessing India’s incentive scheme to enhance the battery manufacturing ecosystem’ by JMK Research, and the Institute for Energy Economics and Financial Analysis (IEEFA), of the 40GWh allocated so far under ACC PLI, Reliance New Energy is the only beneficiary that has indicated commissioning its second-round award capacity (10GWh) on time.
Ola Electric plans to commission 5GWh of its 20GWh by March 2026. However, Ola’s decision to limit its capacity to 5GWh until FY2029 dilutes the commitments the scheme envisions.
Beneficiaries have faced significant supply chain and implementation bottlenecks, such as the stringent domestic value addition (DVA) requirements, an aggressive two-year installation timeline, and visa approval delays for Chinese technical specialists needed for equipment installation, leading to delays in commissioning capacity.
India launched the Advanced Chemistry Cell Production Linked Incentive (ACC PLI) scheme in October 2021 to build domestic battery manufacturing capacity and reduce India’s reliance on imported lithium-ion cells, primarily from China. With an outlay of Rs 18,100 crore, the scheme aimed to establish 50 gigawatt hours (GWh) of advanced battery cell manufacturing capacity in India by 2025.
There is a substantial gap between the intended and actual outcomes of the ACC PLI scheme. Against an estimated 10.3 lakh jobs, it has generated only 1,118 jobs (0.12% of the target). Investment levels have also lagged, with around Rs 2,870 crore committed so far, accounting for 25.58% of the targeted Rs 11,250 crore ($1.29 billion).
“Although strong policy support led to substantial investment announcements and capacity plans outside the ACC PLI scheme, on-ground progress remained sluggish. For beneficiaries, the Centre has imposed a penalty of 0.1% of the performance security for each day of delay in commissioning. Moreover, with India’s dependence on imported battery cells still close to 100%, the scheme’s original objectives remain largely unfulfilled,” says Prabhakar Sharma, senior consultant, JMK Research, and a co-author of the report.
While the ACC PLI tenders attracted overwhelming interest, capacity allocation remains incomplete. The MHI initially allocated the full 50GWh in the first auction held in March 2022, but Hyundai Global Motors’ withdrawal from its 20GWh allocation prompted a second auction. In the September 2024 round, bidders secured only 10GWh.
The government plans to tender the remaining 10GWh at a later stage. As of October 2025, no incentives have been disbursed against the targeted Rs 2,900 crore.
The report also highlights gaps in the scheme’s evaluation framework. Among all bidders across both auction rounds, only Exide Industries and Amara Raja had prior experience in battery manufacturing, yet neither qualified. The evaluation criteria placed greater emphasis on domestic value addition (DVA), proposed capacity, and subsidy benchmarks, where new entrants scored higher, resulting in the selection of firms without prior expertise.
“Going forward, improving the effectiveness of ACC PLI will require a holistic, multi-pronged strategy. This would include introducing robust cell testing and certification infrastructure; scaling up equipment manufacturing, and recycling; and developing skilled domestic talent, among other things,” says the report’s co-author Saif Jahangir, consultant, JMK Research and Analytics.