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India's Production Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC) batteries has developed only 1.4 gigawatt-hours (GWh) of manufacturing capacity against a target of 50 GWh, with commercial production yet to begin, according to a NITI Aayog report.
The report, titled Impact Assessment of PLI Schemes, prepared by NITI Aayog in collaboration with IIM Ahmedabad, said the Rs 18,100 crore scheme has witnessed slower-than-expected progress due to technological limitations, dependence on imports and delays in setting up manufacturing facilities. "The scheme is currently in its early gestation phase, and progress has been slower than anticipated. As of now, only about 1.4 GWh of capacity has been developed against the targeted 50 GWh, and commercial production has not yet commenced," the report stated. The scheme aims to develop domestic manufacturing capacity for advanced batteries used in electric vehicles and energy storage systems, reducing India's dependence on imported battery technologies. According to the report, cumulative investment under the scheme reached Rs 4,570 crore by March 2026, while employment generation stood at 1,245. However, no incentive disbursements have been reported as commercial production is yet to commence. Highlighting the challenges, the report said India's limited domestic capabilities in advanced battery manufacturing have resulted in continued dependence on foreign technology and expertise. It noted that the absence of a developed domestic supply chain for critical battery components, including cathodes, anodes and minerals such as lithium and cobalt, has made it difficult for manufacturers to meet localisation requirements. The scheme requires beneficiary companies to achieve at least 25 per cent domestic value addition by the end of the second year and 60 per cent by the fifth year. The report observed that these requirements appear difficult to achieve given India's current manufacturing capabilities. "Weak execution is reflected in the limited capacity addition so far and the lack of incentive disbursement, while slower-than-expected growth in electric vehicle demand has also dampened the pace of investment," it stated. It further noted, "Together, these factors suggest that the scheme's lag is not merely cyclical but rooted in deeper structural constraints." The assessment also highlighted that one beneficiary company was disqualified for suppression of material facts. However, the report maintained a positive longer-term outlook, noting that investments in advanced battery technologies require substantial time before translating into production. "Therefore, while the outlook is positive, actual impact can only be felt over time," it stated. (ANI)
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