India's Battery Recycling and ACC Policy Push Creates New Opportunities for Domestic Manufacturing

August 18, 2026

Speaking at the 12th India Energy Storage Week (IESW) 2026 in New Delhi in July, Vijay Mittal, Joint Secretary at the Union Ministry of Heavy Industries (MHI), said the ministry is considering broader policy support for battery recycling and Advanced Chemistry Cell (ACC) manufacturing as India's battery ecosystem expands. He also highlighted collaborative battery-recycling pilot initiatives involving India and the European Union.

The policy direction signals a broader shift in India's approach: from a framework focused primarily on incentivising cell manufacturing capacity toward one that increasingly recognises battery recycling, critical-material recovery, and component manufacturing as important parts of a resilient domestic battery value chain.

Why is India Increasing Policy Support for Battery Recycling?

The policy push comes as domestic ACC manufacturing remains at an early stage relative to India's targets. According to the Ministry of Heavy Industries, 40 GWh of capacity has been awarded to four beneficiary firms under the ACC PLI scheme, while 1.4 GWh of giga-scale ACC manufacturing capacity had been established as of May 31, 2026. The gap between awarded capacity and capacity established so far highlights the execution challenge involved in building India's domestic battery manufacturing ecosystem.

Meanwhile, a separate May 2026 IEEFA report projected India's battery demand to grow from 28 GWh in 2025 to 272 GWh by FY2030, a nearly tenfold increase, while warning that the country risks simply replacing its oil import dependence with battery import dependence if cell manufacturing capacity does not scale in step.

Separately, India's broader energy-storage requirements are also expected to expand substantially. Government planning estimates envisage approximately 888 GWh of energy-storage capacity by 2035-36, comprising around 321 GWh of battery energy storage systems (BESS) and 567 GWh of pumped-storage projects. The projected expansion of BESS, alongside EV growth and other battery applications, reinforces the need for deeper domestic battery manufacturing, component, and recycling capabilities.

What is Advanced Chemistry Cell (ACC) Manufacturing and Why Does It Matter?

Advanced Chemistry Cell (ACC) manufacturing involves producing new-generation battery cells, including lithium-ion and related chemistries. These cells store electrical energy for electric vehicles and renewable energy storage systems.

The ACC PLI scheme, approved in 2021 with an outlay of INR 18,100 crore, targets the development of 50 GWh of domestic ACC manufacturing capacity. As of May 2026, 40 GWh had been awarded to four beneficiary firms, according to the Ministry of Heavy Industries.

ACC manufacturing matters because cells sit at the centre of the battery value chain. Without domestic cell production, India's EV and energy-storage growth could increase dependence on imported cells, particularly from China. The development of domestic ACC manufacturing capacity has faced challenges including technology selection, financing, supply-chain development, localisation requirements, and project execution.

How Does Lithium-Ion Battery Recycling Support Domestic Manufacturing?

Lithium-ion battery recycling recovers critical materials, principally lithium, cobalt, nickel, and graphite, from end-of-life batteries and manufacturing scrap, feeding them back into new cell and component production rather than requiring fresh imported or mined material. This directly supports domestic battery manufacturing because these materials represent strategically important inputs for lithium-ion battery production, making recovery from end-of-life batteries and manufacturing scrap increasingly relevant to domestic supply-chain development.

A functioning battery recycling industry in India therefore does not just manage waste; it becomes a genuine secondary source of the same critical minerals that ACC manufacturers need to source for new cell production, reducing the exposure of India's battery manufacturing investment to global critical-mineral price volatility and supply concentration.

How Can Battery Recycling Reduce Dependence on Imported Battery Materials?

India remains substantially dependent on imports for key battery components and materials, including cathode active materials (CAM), anode active materials (AAM), copper foil, electrolytes, and separators. This dependence has increased policy attention on developing domestic component-manufacturing and critical-material processing capacity.

Media reports indicate that the government is considering an incentive programme of around INR 12,000 crore to support domestic manufacturing of advanced battery components and materials, including copper foil. As the proposed programme is still under development, its final scope, eligibility criteria, incentive structure, and implementation timeline should be assessed once official guidelines are notified.

The Ministry of Mines is separately pursuing initiatives aimed at strengthening domestic critical-mineral exploration, processing, and refining. Together with proposed support for battery-component manufacturing, these measures could complement recycling by strengthening more stages of India's domestic battery value chain. Recycling can provide secondary raw materials from batteries and manufacturing scrap, while domestic processing and component manufacturing can help convert raw and recovered materials into inputs suitable for battery production.

What Opportunities Does India's Battery Policy Create for Manufacturers and Investors?

The widening policy scope creates new opportunities across the battery value chain. Early-stage lithium-ion battery recycling and black mass recovery could see greater investment interest if the proposed policy measures translate into defined incentives, pilot programmes, and implementation frameworks. Component manufacturers targeting copper foil, cathode active materials, anode active materials, electrolytes, and separators could also see greater investment opportunities if proposed support measures are translated into notified incentive programmes.

Large volumes of end-of-life EV batteries are expected to enter India's recycling stream toward the end of this decade. Companies developing recycling and component-manufacturing capacity now could therefore position themselves ahead of this expected growth.

How Can Engineering Consultants Support Battery Recycling and ACC Manufacturing Projects?

Converting this policy direction into operating recycling and ACC manufacturing capacity depends on engineering work that incentive frameworks alone do not provide. A feasibility study needs to evaluate recycling technology choice — hydrometallurgical, pyrometallurgical, or hybrid processes — against the specific feedstock composition and volume a project expects to process, since technology suited to lead-acid recycling is not interchangeable with lithium-ion black mass recovery.

Plant planning for an ACC manufacturing facility involves an entirely different equipment and utility footprint from a recycling plant, and companies evaluating both need engineering support to size each correctly against realistic offtake and feedstock agreements rather than optimistic capacity assumptions.

Regulatory approvals have to be sequenced against construction and equipment procurement from the earliest planning stage. And project execution, from equipment selection through commissioning, determines whether a facility actually reaches the throughput and recovery efficiency its investment case assumed.

India's ACC PLI programme targets 50 GWh of domestic manufacturing capacity, while 1.4 GWh of giga-scale ACC capacity had been established as of May 2026. As battery demand expands, the effectiveness of wider policy support for recycling, components, and cell manufacturing will ultimately depend on how successfully announced and awarded projects progress into commercially operating capacity.

IMARC Engineering’s Perspective

MHI's consideration of broader policy support for battery recycling and ACC manufacturing signals an evolving battery strategy that could extend beyond cell-production incentives to include recycling, components, and critical-material recovery.

At IMARC Engineering, we see this as the moment where technical execution becomes the differentiator for companies entering this space. We support battery recyclers, ACC manufacturers, and component producers with feasibility studies matched to specific feedstock and technology choices, plant planning and equipment selection for recycling and cell manufacturing facilities, regulatory approval sequencing, and project execution through commissioning.

As India works to close the gap between its 50 GWh ACC PLI target and the 1.4 GWh of giga-scale ACC manufacturing capacity established as of May 2026, and to build the recycling infrastructure its coming wave of end-of-life EV batteries will require, the companies that pair emerging policy support with rigorous engineering planning will be better positioned to convert investment plans into commercially operating capacity.