India Must Boost Battery, EV Tech Manufacturing To Stay Competitive: NITI Aayog Report

India needs to speed up domestic production of batteries, manufacturing equipment and advanced electric vehicle (EV) technologies to avoid being stuck at the lower end of the global EV value chain, NITI Aayog has said.

The warning comes in the latest Trade Watch Quarterly for Quarter I of FY 2025–26 (April–June 2025), released on Tuesday in New Delhi by NITI Aayog member Dr Arvind Virmani.

“India needs to enhance export competitiveness by rationalising incentives and correcting cost distortions, expanding export-linked financing for emerging markets, reducing inland and port logistics costs, and accelerating domestic production of critical inputs such as EV batteries,” the report said.

The government think tank said India’s heavy reliance on imported

battery-making equipment and advanced technologies is hurting its trade competitiveness and long-term position in the global EV market. Without local capabilities in high-precision machinery and next-generation battery technologies, India mainly exports assembled vehicles while importing high-value components.

“This structural gap limits India’s ability to scale exports of high-value battery cells, packs, and power electronics, especially as global leaders consolidate their dominance through tight technology control and vertically integrated supply chains,” the report noted.

NITI Aayog warned that as global markets move towards advanced battery chemistries and stricter quality standards, India risks losing ground unless it builds domestic strength in manufacturing equipment, testing infrastructure and process innovation. It called for targeted foreign direct investment, technology partnerships and dedicated equipment-testing centres to reduce import dependence and move up the value chain.

The report noted that while global EV imports surged nearly 30 times between 2020 and 2024, India’s share remains around 0.1 per cent of both global exports and imports.

World EV imports rose from $4.6 billion in 2020 to almost $150 billion in 2024. India’s EV exports increased from $1.2 million to $84 million over the same period, while imports reached $211 million in 2024, resulting in a trade deficit of $170.5 million.

India’s EV exports are mainly small, affordable vehicles, with Nepal accounting for 46.4 per cent of shipments in 2024. Markets such as Indonesia and Japan have also emerged, though volumes remain modest.