As India accelerates the adoption of BEVsElectrification remains the dominant lever for reducing India’s import bill
India is steadily transitioning its transport fleet into electric but now the critical imperative for the country is to insulate this sector from external disruptions arising out of conflicts. While rapid transition towards electric mobility successfully decouples the nation’s economy from highly volatile conventional fuel markets, it also threatens to swap one form of import reliance from another.
There is a risk of shifting the nation’s vulnerability from conventional fuel markets to highly concentrated foreign battery supply networks. To mitigate this risk, accelerating the degree of battery manufacturing localisation is no longer just an industrial goal, but a strategic necessity.
Localising the midstream and upstream components of battery production as well as moving beyond simple pack assembly to cell manufacturing and material processing safeguards Indian Original Equipment Manufacturers (OEMs) against sudden trade embargoes, geopolitical bottlenecks and price manipulation.
A working paper by the International Council on Clean Transportation (ICCT) points out that as India accelerates the adoption of BEVs, dependence on imported batteries and remaining petroleum demand will have significant implications for the country’s long‑term import payments and energy security. “The extent to which electrification reduces import dependence is determined by not only the pace of vehicle electrification but also by the degree of battery manufacturing localization,” it points out.
This study projected India’s BEV battery demand across on-road vehicle segments from 2024 to 2050 under baseline, momentum, and ambitious electrification scenarios. Let us take a look at the key highlights of the paper and the proposed way forward.
Fig 1: An automated lithium-ion battery production line operates at a workshop in Yongkang, Zhejiang province, China November 11, 2025. China Daily via REUTERS/File Photo
It found that the “annual battery demand across all vehicle segments increases rapidly after 2030 across all scenarios, reaching around 340 GWh under the Baseline scenario and around 573 GWh under both the Momentum and Ambitious scenarios in 2050. Higher near‑term electrification accelerates the growth of battery demand, although long‑term demand converges as vehicle electrification saturates the fleet.”
However, it also found that in the near future, the battery supply chains will remain dependent on imports despite localisation. “As a result, imports meet essentially all of 2030 demand across localization pathways. The pathways diverge from the early 2030s onward, when domestic capacity ranges from meeting none of demand under the No Localization pathway to meeting effectively all demand under the High Localization pathway by 2040 and beyond,” it said.
Observing that electrification is the dominant lever impacting India’s import bill across scenarios, the paper pointed out that even with no domestic manufacturing, the 2050 import bill is about 39% lower under the Momentum scenario and 61% lower under the Ambitious scenario compared with the Baseline scenario (US 59 billion, respectively, compared with US$153 billion).
“This outcome arises because avoided oil imports outweigh battery imports by an order of magnitude. Under high oil-price assumptions, the absolute savings from electrification increase further, widening the gap between the Baseline and Ambitious scenarios from US$104 billion under the reference oil-price case to US$166 billion under the high oil-price case in 2050,” it said.
The analysis found that India’s 2050 import bill can be reduced by US$125 billion between the least and most favorable cases.
“Of this total reduction, US$94 billion is attributable to accelerated electrification, reflecting the shift from the Baseline to the Ambitious scenarios, while an additional US$31 billion comes from scaling domestic battery manufacturing from No Localization to High Localization. Although domestic manufacturing helps lower import dependence by substituting for battery imports, electrification alone accounts for three-quarters of the total reduction, making it the dominant lever for reducing import payments,” it added.
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