Union Budget 2026: Why India’s battery ecosystem must be built from the ground up

This article is authored by Vikram Handa, Managing Director, Epsilon Advanced Materials Pvt. Ltd.India’s energy transition has entered a decisive phase. Electric vehicles are scaling, renewable energy capacity is expanding, and the conversation has moved well beyond targets and intent. The real challenge now is execution, and more importantly, whether India is building the industrial capability required to sustain this transition over the long term.As Union Budget 2026 approaches, batteries for EVs and BESS sit at the centre of this discussion, as they are critical to clean mobility, grid stability, and energy security. Yet, much of the focus so far has been on cell manufacturing alone. While cell manufacturing is essential, it is only one part of the value chain, and not necessarily the place where long-term competitiveness is determined. The scale of the challenge is significant. Industry estimates suggest that Battery Energy Storage System (BESS) deployments alone could reach nearly 208 GWh by 2030. This is comparable to the battery capacity required for close to 3 million electric vehicles. Meeting such demand would require vast quantities of critical materials including 200kT of graphite anodes, 400kT of LFP cathodes, along with electrolyte, copper foil, and aluminium foil.At present, nearly 100% of these materials are imported from China who also dominates the global supply chains. This creates a strategic vulnerability. As India reduces its dependence on fossil fuels, there is a real risk of replacing one form of energy dependence with another - this time on imported battery materials. In a volatile global environment, such concentration of supply is not merely a cost issue; it is a question of strategic autonomy.This dependence will only intensify as electric mobility scales in India. Several states have already set EV penetration targets of 15 to 25 per cent by 2030, particularly across two-wheelers, three-wheelers, public transport, and commercial fleets. Battery demand from mobility and grid-scale storage will grow in parallel, compounding pressure on supply chains.For the vision of Atmanirbhar Bharat and Make in India to be realised meaningfully, India’s battery ecosystem must therefore be built from the ground up. This means moving upstream — into mining and the manufacturing of advanced battery materials such as anodes and cathodes. These components largely determine battery cost, performance, and reliability, and they account for a significant share of value creation and supply-chain risk.Without domestic capability in these areas, cell manufacturing risks remaining assembly-led rather than innovation-driven. Countries that have built globally competitive battery ecosystems have done so by tightly integrating material science into cell engineering. This integration allows faster innovation, better performance optimization and a much resilient scaling.Such integration is especially important because qualifying new battery materials is neither quick nor easy. For cell manufacturers, material qualification can take three to five years. Once locked into a supply relationship, switching becomes complex and costly. Ecosystems, therefore, cannot be built in silos; they must evolve collaboratively over time.Policy has a critical role to play in enabling this shift. Manufacturing advanced battery materials is capital intensive and technologically demanding. It involves high upfront investment, long gestation periods, and early-stage risk before commercial scale is achieved. These realities need to be reflected more clearly in industrial policy.As expectations from Union Budget 2026 take shape, targeted support for upstream battery materials could be transformative. CAPEX subsidies or risk-sharing mechanisms for anode and cathode manufacturing would help convert intent into execution. Equally important is policy alignment between EV adoption incentives, ACC manufacturing schemes, and broader industrial strategy. When these elements work in sync the ecosystems form. When they operate in isolation, progress remains fragmented.India has a real opportunity to emerge as a credible alternative in the global battery supply chain that can offer scale, quality, and reliability, while meeting global standards on sustainability and transparency. This aligns fully with the spirit of Make in India, not just for domestic needs, but for global markets as well.Union Budget 2026 can send a decisive signal. By strengthening upstream capabilities, encouraging value-chain integration, and reinforcing strategic self-reliance, India can build a resilient and globally competitive battery ecosystem. The choices made today will shape India’s position in the global energy transition for decades to come.Disclaimer: Views and opinions expressed in this article are solely those of the original author and do not represent any of The Times Group or its employees.