India's battery chemicals ecosystem set for rapid expansion as ACC demand surges: Nuvama
India's battery chemicals ecosystem is on the cusp of a major expansion, propelled by a surge in demand for advanced chemistry cells (ACC), according to a recent report by Nuvama. The report highlights that the country's push towards electric mobility and renewable energy storage is creating a robust market for battery-grade chemicals such as lithium, cobalt, nickel, and manganese. Analysts say that the domestic production of these critical inputs is expected to scale up significantly over the next few years, reducing reliance on imports and strengthening the supply chain.
The Nuvama report underscores that India's ACC demand is projected to grow at a compound annual growth rate (CAGR) of over 30% through the end of this decade. This growth is being driven by the government's Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, as well as state-level policies promoting electric vehicle (EV) adoption. Additionally, the production-linked incentive (PLI) scheme for ACC manufacturing is attracting investments from both domestic and international players. As a result, the battery chemicals segment is expected to witness a cumulative investment of over ₹1 lakh crore by 2026, creating thousands of jobs and fostering innovation in recycling and raw material processing.
“India's battery chemicals ecosystem is set for rapid expansion, with ACC demand surging. The PLI scheme and government support are key catalysts, but challenges around raw material availability and technology transfer remain,” analysts say.
A key highlight of the report is the projected capacity addition for battery chemicals in India. The table below summarises the expected capacity for key battery chemicals by 2026:
| Chemical | Current Capacity (2023, in tonnes) | Projected Capacity (2026, in tonnes) | Growth (%) |
|---|---|---|---|
| Lithium Carbonate | 2,500 | 12,000 | 380% |
| Cobalt Sulphate | 1,800 | 7,500 | 317% |
| Nickel Sulphate | 3,200 | 15,000 | 369% |
| Manganese Sulphate | 4,000 | 16,000 | 300% |
Despite the optimistic outlook, the report cautions that India's dependence on imports for critical minerals like lithium and cobalt remains a vulnerability. To mitigate this, companies are exploring partnerships with resource-rich nations and investing in battery recycling technologies. Analysts also point out that the success of the ecosystem hinges on the development of a skilled workforce and the establishment of robust quality standards. With the right policy framework and industry collaboration, India's battery chemicals sector could become a global hub, supporting not only domestic EV ambitions but also exports to markets in Southeast Asia and Africa.
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