India’s energy storage crisis

In October 1973, OPEC reminded the world that energy is not an input to growth; it is leverage. India learned that lesson at considerable cost, and we have spent the half-century since building strategic reserves, diversifying our crude suppliers across continents, and treating hydrocarbons as a question of statecraft rather than commerce.

Yet as India moves to reduce its dependence on oil, it risks exchanging one strategic vulnerability for another—one even harder to escape: batteries.

The headline number from the renewables build-out is impressive on its own. India has crossed 280 GW of non-fossil capacity against the 500 GW target for 2030, and the annual rate of additions is the highest in our history. Generation is not the problem. The problem sits underneath the build-out; in the question of what happens when the Sun sets and the wind drops.

The Central Electricity Authority estimates that India will need roughly 74 GW and 411 GWh of energy storage by 2031-2032 to integrate the renewable fleet we have committed to. Data centres and telecom densification add further demand.

Against that pipeline, our installed battery storage today stands at less than 1 GWh. The gap will be filled. The only open question is by whom.

Here the picture darkens, and quickly. India’s Economic Survey 2024-2025 confirmed that roughly three-quarters of our lithium-ion battery imports come from China.

The International Energy Agency’s 2025 outlook on critical minerals records that Beijing dominates the refining of 19 of the 20 strategic minerals that matter, with an average market share of around 70 per cent. For lithium-iron-phosphate cathode — the chemistry that dominates stationary storage — the Chinese share exceeds 98 per cent. This is not a market; it is a monopoly with a foreign policy.

The leverage is not theoretical. In April 2025, Beijing imposed export controls on seven heavy rare earths; by October, European prices were running up to six times those inside China. Controls were subsequently extended to battery technology, cathode preparation, and graphite anodes before being suspended as part of a broader trade understanding. Suspension is not withdrawal. The instrument has been laid on the table and can be lifted at any time.

Indians of a certain memory will recognise the pattern. We outsourced semiconductors; we told ourselves the market would eventually pull manufacturing home, and we are now spending a decade and tens of billions trying to claw our way back. The same story is playing out in active pharmaceutical ingredients.

Batteries are heading in the same direction, only faster — and the stakes are higher, because storage is not a consumer good. It is the spine of the energy transition we have committed to.

It is not for want of trying. The Advanced Chemistry Cell PLI scheme, launched in 2021 with an outlay of Rs 18,100 crore, targeted 50 GWh of domestic cell manufacturing by 2025.

As of December, 40 GWh had been awarded across four firms, of which only 1 GWh had been commissioned, and no incentive has yet been disbursed. The specialists required to commission cell lines needed Chinese work visas. The scheme was not a failure of intent; it was a reminder that strategic ambition must be matched to chemistries where the upstream is accessible.

That is the conversation India has not yet had cleanly. Policy still treats storage as a single category. It is not. An electric vehicle battery is built around energy density — weight matters, lithium wins. A grid battery or data-centre backup has no such constraint. It needs cycle life of over 10 to 15 years, thermal safety in occupied environments, and predictable sourcing across asset lives that outrun any procurement cycle. Written around those variables, several non-lithium chemistries become genuinely viable.

The chemistries worth backing are the ones where India already has the upstream. Zinc is the cleanest case. India is among the world’s top five zinc producers, with an integrated mining and smelting base in Rajasthan operating at global scale. The upstream does not need to be invented; what does not yet exist is the bridge from refined zinc to battery-grade material to an Indian-manufactured cell, and that bridge is a policy choice, not a technology gap.

Sodium offers a parallel opportunity, side-stepping cobalt, nickel, and graphite — the three minerals Beijing holds most tightly. Indian institutions are already moving.

The International Advanced Research Centre for Powder Metallurgy and New Materials has signed an MoU to commercialise an indigenously developed sodium vanadium phosphate cathode. These are chemistries that align Indian resources with Indian demand. They belong at the centre of any serious conversation about energy sovereignty.

When Prime Minister Narendra Modi appealed to citizens earlier this month to conserve fuel and protect foreign exchange, he was naming the cost of an energy system built on imported inputs. That cost is now about to be transferred from oil to electrons. The next 18 to 36 months will lock in the infrastructure on which India’s grids, data centres, telecom networks and industries will depend for a generation.

The choice is not between lithium and an alternative. It is between accepting whatever the current supply chain delivers at whatever price Beijing decides, and deliberately building a storage industry where the cell is Indian, the electrolyte is Indian and the input minerals are Indian.

We know what dependency costs because we are watching an older version play out in oil markets right now. The debate over whether storage matters is over. The question is whether, when this decade is written up, India will be recorded as a country that built its own batteries — or one that, for the second time in 50 years, let someone else decide when its lights stay on.

(The writer is a veteran technology executive and entrepreneur with
global experience across AI, digital transformation, and deep science ventures)