Battery storage manufacturing in India: A strategic perspective

Abstract

India's ambitious decarbonization goals for 2030 – 40% of electricity generation capacity from renewable energy and 30% of automobile sales as electric vehicles – are expected to create significant demand for battery storage in India. This provides an opportunity for India to become a leader in battery storage manufacturing. However, setting up appropriate conditions for the same would require an understanding of the typical barriers faced by a country's industry in establishing manufacturing competency. To do so, this study first develops a critical barrier framework by identifying and assimilating barriers to industrial development, via a comprehensive literature review on industrial development. This framework consists of barriers that fall under three main categories, namely Getting to Scale, Resources and Infrastructure, and Global Competitiveness; and it posits that all these barriers need to be overcome for an industry to be successful. This framework is then verified using international and Indian case studies on the automobile, pharmaceutical, and solar photovoltaic industries. This framework is subsequently used to provide suggestions to policymakers for consideration, including the following: First, clearly identifying target markets; second, potentially exploring the use of protectionist measures; third, enabling entry in the value chain closer to the end product, while ensuring appropriate access to infrastructure and resources; and, eventually moving up higher in the value chain, via a focus on research and development.