India widens policy support for ACC, battery recycling to secure critical minerals

India is preparing to widen policy support for advanced chemistry cells (ACC) and battery recycling as it seeks to strengthen domestic battery manufacturing and reduce dependence on imported critical minerals. The proposed measures indicate that the government's focus is extending beyond cell production to include recycling, battery components and niche battery technologies, reinforcing both electric mobility and renewable energy storage.

Speaking at the 12th India Energy Storage Week (IESW) 2026 in New Delhi, Vijay Mittal, Joint Secretary, Ministry of Heavy Industries (MHI), announced the ministry’s plan to expand the existing ACC incentive framework following industry requests for dedicated policies covering “niche battery technologies.”

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"There have been repeated requests for creating specific policies for niche battery technologies, and going forward, we also see the need to expand the existing incentive system for advanced chemistry cells so that more operators and partners in the field can be covered," Mittal said.

He added that the Ministry of Heavy Industries and the Office of the Principal Scientific Adviser to the Prime Minister, have “tied up with the European Union to create pilot projects in the field of recycling.”

Government seeks to strengthen domestic battery ecosystem

India has been working to reduce its reliance on imported battery materials while accelerating local manufacturing. It also involves concerns over the comparatively slow progress of the country's ACC manufacturing programme.

According to a January 2026 report by the Institute for Energy Economics and Financial Analysis (IEEFA), only 1.4 GWh of the 50 GWh capacity approved under the ACC Production-Linked Incentive (PLI) scheme had been commissioned by October 2025, mainly due to supply chain disruptions, implementation delays and domestic value-addition requirements.

Launched in 2021 with an outlay of INR 181 billion (USD 1.89 billion), the ACC PLI scheme aims to establish 50 GWh of battery manufacturing capacity along with an additional 5 GWh for niche technologies. Reliance New Energy Solar, Ola Electric Mobility and Rajesh Exports were selected under the programme.

Although their projects have experienced delays related to technology selection, financing and supply-chain issues, commercial production is expected to gather pace over the coming years.

The scheme complements the government's PM E-Drive programme and critical mineral initiatives led by the Ministry of Mines.

Recycling gains importance as battery demand accelerates

India's battery demand is forecast to increase sharply over the next few years. Another IEEFA report, published in May 2026, projected demand to grow from 28 GWh in 2025 to 272 GWh by FY2030, although the country risks replacing oil import dependence with battery import dependence because of its continued reliance on imported cells.

It also noted that around 66 GWh of announced capacity outside the PLI scheme is largely focused on battery pack assembly rather than cell manufacturing.

Meanwhile, a study by the India Energy Storage Alliance (IESA) and Customized Energy Solutions estimates that India will require 888 GWh of energy storage capacity by 2035-36, compared with only about 1 GWh currently installed. The country has already commissioned around 7.5 GWh of storage capacity, while more than 140 GWh is under construction, awarded or in the tendering stage.

Mittal added that the ministry is evaluating support for battery component manufacturing, including an ALMM-like framework for battery components, while the Ministry of Mines is introducing initiatives to promote refining of critical minerals needed for battery production.

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Industry backs wider policy support

Industry executives welcomed the government's broader policy direction, saying stronger support for recycling and domestic manufacturing could help position India as a global battery hub.

Vinayak Walimbe, Managing Director of Customized Energy Solutions, said that expanding incentives beyond cell manufacturing would “drive domestic innovation and accelerate our transition to a sustainable, globally competitive battery ecosystem."

Harin Kanani, Managing Director of Neogen Chemicals, mentioned, "We started working with lithium chemistry decades ago, and today, Indian-made batteries are already showing better performance than imported ones.” He further noted that policy certainty is encouraging fresh investments across the battery value chain.   

Similarly, Vikram Handa, Managing Director of Epsilon Advanced Materials, said, “...we are very positive that the government will give us future signals to show that they would like to support.”

India's first large volumes of end-of-life electric vehicle (EV) batteries are projected to enter the recycling stream toward the end of this decade. This is expected to make domestic recycling infrastructure increasingly important for recovering lithium, cobalt, nickel and graphite, strengthening resource security and supporting a circular battery economy.