PLI for Advanced Chemistry Cells: Who's Building What in India

India's Production Linked Incentive (PLI) scheme for Advanced Chemistry Cells (ACC) was announced in May 2021 with an outlay of ₹18,100 crore and a target of 50 GWh of domestic cell manufacturing capacity by 2027–2028. Three years and multiple revisions later, the programme presents a mixed picture: genuine progress in some quarters, significant delays in others, and a market reality that is evolving differently from the scheme's original design assumptions.

For developers, manufacturers, and investors in India's energy storage sector, understanding who is actually building cell manufacturing capacity — and on what timeline — is essential for supply chain planning. This article provides an honest assessment of PLI ACC's current status and what it means for the Indian BESS market.

The PLI ACC Framework: A Quick Recap

The PLI ACC scheme offers incentives to battery cell manufacturers based on domestic production output. The incentive structure rewards:

• Domestic value addition: Manufacturers earn higher PLI rates by using domestically sourced inputs — cathode materials, electrolytes, separators — rather than importing assembled cell precursors from China
• Technology requirement: Cells must meet minimum energy density specifications (>200 Wh/kg for cylindrical, >180 Wh/kg for prismatic) and cycle life thresholds
• Phased capacity: Manufacturing lines must be operational within specified timelines, with incentive disbursement linked to actual production

The scheme was structured in two rounds. Round 1 (2021) allocated 30 GWh to four companies. Round 2 (2022) allocated the remaining 20 GWh.

Round 1 Awardees: Current Status

Ola Electric (10 GWh allocation)

Ola Electric is the most publicly visible PLI ACC awardee, with aggressive announcements about its Futurefactory in Krishnapatnam, Andhra Pradesh. Ola began manufacturing 4680-format cylindrical cells for EV applications in late 2023, but progress toward the full 10 GWh capacity has been slower than announced timelines.

As of mid-2026, Ola has installed approximately 1.5–2 GWh of cell manufacturing capacity, primarily producing NMC cylindrical cells for its own EV models. LFP cell manufacturing — the relevant chemistry for grid storage — is on Ola's roadmap but not yet in production. PLI disbursements have been delayed pending compliance review. Ola's grid storage relevance is limited in the 2026–2027 timeframe.

Market impact for BESS: Minimal in next 24 months.

Reliance Industries (10 GWh allocation)

Reliance announced its New Energy division's gigafactory plans with enormous ambition — a fully integrated battery manufacturing complex in Jamnagar, Gujarat, encompassing cell chemistry, electrolyte production, and separator manufacturing. Reliance partnered with Lithium Werks (Netherlands) for LFP cell technology and signed agreements with several Chinese equipment suppliers for gigafactory infrastructure.

Progress has been slower than initially indicated. Construction timelines for the Jamnagar complex have shifted multiple times, and commercial LFP cell production from Reliance is now projected for 2027 rather than 2025–2026 as originally targeted. Reliance's scale ambition remains genuine — the Jamnagar complex, when operational, could become a significant LFP cell source for Indian BESS projects.

Market impact for BESS: Potential from 2027–2028 onwards, not yet a reliable supply chain option for 2026 projects.

Rajesh Exports (5 GWh allocation)

Rajesh Exports — a gold jewellery manufacturer — pivoted aggressively into battery manufacturing through a JV with a Chinese cell technology partner. The company's subsidiary, Arzoman, planned a cell manufacturing facility in Karnataka. However, the project has faced severe difficulties: the Chinese technology partner withdrew from the JV in 2023, and Rajesh Exports has been seeking alternative technology partnerships since.

As of 2026, Rajesh Exports' PLI ACC allocation is under review by MNRE. The 5 GWh allocation may be reallocated to other applicants if compliance milestones are not met.

Market impact for BESS: Negligible.

Lucas TVS (5 GWh allocation)

Lucas TVS, the automotive components manufacturer, has taken a methodical approach to cell manufacturing — arguably the most realistic of the Round 1 awardees. The company is constructing a facility in Chennai for cylindrical NMC cells, with a focus on supplying the Indian EV market (2-wheelers, 3-wheelers) rather than grid storage directly.

Lucas TVS's cell format and chemistry (NMC 21700 cylindrical) is not the primary format used in grid-scale BESS, which uses large-format LFP prismatic cells. However, Lucas TVS's manufacturing expertise and domestic battery knowledge position them well for future format expansion.

Market impact for BESS: Indirect — validates domestic manufacturing capability but wrong chemistry/format for grid storage.

Round 2 Awardees: The More Interesting Story

Round 2 included several applicants with more focused grid storage ambitions. KPIT Technologies (in consortium) and two other undisclosed awardees received 20 GWh in aggregate. MNRE has not publicly disclosed all Round 2 awardees as of mid-2026, citing competitive sensitivity.

Industry sources indicate that Round 2 includes at least one consortium with a Chinese cell technology partner and a domestic integration JV structure that is specifically targeting LFP prismatic cells for grid storage. Timeline for commercial production: 2027–2028.

What This Means for 2026 BESS Projects

For a developer or integrator procuring cells for a BESS project commencing construction in 2026 or early 2027, the honest answer is that domestic PLI ACC cell production is not a viable supply chain option. Imported cells from Chinese Tier 1 manufacturers (CATL, BYD, CALB, EVE) remain the only commercially available, quality-proven LFP cell source for Indian grid storage projects.

This is not a failure of the PLI scheme — it is a reflection of the reality that building greenfield lithium-ion gigafactories takes 4–6 years from planning to commercial-scale production. The PLI ACC scheme was announced in 2021; significant domestic cell production was never realistic before 2026–2027 at the earliest.

The window where domestic PLI cells become a viable supply option is 2028–2030. By that point, assuming Reliance's Jamnagar complex is operational and potentially one Round 2 awardee is producing at scale, Indian cell supply could meet 20–30% of domestic BESS demand.

The Integration Layer: Where India Is Already Winning

While cell manufacturing is delayed, the integration layer — assembling imported cells into BMS-equipped, PCS-integrated, fully tested BESS containers — is already domestic and growing. This is the segment where Indian manufacturers like SilicIndia Energies operate.

The import duty differential (10% on cells vs 20% on complete systems) creates a structural incentive for domestic integration. Domestic BESS integration delivers:

• Customs duty savings: ₹6–12 lakh/MWh versus importing complete systems
• Faster delivery: 8–14 weeks for domestically integrated systems versus 16–24 weeks for imported complete systems
• Warranty and service: Indian-entity warranty enables faster resolution and avoids the jurisdictional complexity of international warranty claims
• Make-in-India compliance: Satisfies DCR provisions for government-tendered projects

As PLI cell manufacturing matures, domestic integrators are positioned to capture increasing value — transitioning from imported cell + domestic integration to fully Indian-made systems as cell supply develops.

The Policy Implication

India's PLI ACC scheme will succeed, but on a longer timeline than originally targeted. The most important policy correction needed is flexibility in the domestic content requirement for cells — the current framework penalises integration manufacturers who want to use PLI incentives for the integration layer while cells are imported. MNRE has indicated it is reviewing this provision, but no amendment has been issued.

For the industry, the clearest near-term ask of policymakers is: recognise domestic BESS integration as Make-in-India for procurement preference and RPPO compliance purposes, even while domestic cell manufacturing scales up. This would accelerate the development of an Indian BESS supply chain at the integration layer — which is shovel-ready — without waiting for the cell manufacturing layer, which will take several more years.

SilicIndia Energies manufactures BESS systems at our Mandvi, Surat, Gujarat facility using imported Tier 1 LFP cells. Our integration capability is Indian, our supply chain management is Indian, and our service network is Indian. As PLI cell production matures, our supply chain will evolve — the integration competency stays here. Contact us to discuss your project's supply chain requirements.