India is going green and experiencing a clean energy revolution, thanks to lithium battery technology to help electric mobility and renewable energy storage. Policies outlined in the 2025 Union Budget will set a particular course for the lithium battery startups in the country. One of the conditions of this battery maturity is that the government is pushing for Domestic Manufacturing with reduced taxation and increased research funding.
These initiatives will benefit AQUEOUSS, which is dedicated to cutting-edge battery innovations and appropriate solutions for the planet. Businesses that wish to laterally scale their operations in the fast-emerging battery market in India have a golden opportunity to follow the lead from the budget to strengthen local supply chains, invest in lithium mining, and expand the EV infrastructure.
The Key Highlights of the 2025 Budget for Lithium Battery Startups
To accelerate India’s position as a lithium battery hub on the global stage, a bunch of incentives and policy measures are being introduced in the 2025 budget.
Expansion of the Production-Linked Incentive (PLI) Scheme
The biggest announcement is the expansion of the Production-Linked Incentive (PLI) scheme for the manufacturing of advanced chemistry cell (ACC) batteries. The revised scheme provides higher subsidies and incentives to startups that would achieve higher domestic sourcing and production efficiency.
The government wants to use the strategy of local manufacturing to diminish dependence on imports and make India a key player in the battery supply chain.
Reduction in GST on Lithium-Ion Batteries
The reduction of GST on lithium-ion batteries from 18% to 5% is another important development. It will also lower the cost manufacturing of batteries to make electric vehicle (EV) makers and energy storage companies sell more Lithium batteries to consumers at a cheaper rate. Therefore, demand for the production of indigenous batteries is expected to increase resulting in new start-ups joining the industry.
Increased funding in the Research and Development (R&D)
The government has spent about ₹5,000 crores for battery research and development (R&D). It would bring grants and subsidies for startups that focus on next-generation tech using technologies like solid-state batteries, sodium ion alternatives, ultra-fast charging etc. The funding will be instrumental in bolstering India’s global battery technology.
Expansion of EV Charging Infrastructure
As the charging infrastructure for EVs in India expands rapidly, a budget has been allocated for national charging stations. Moving to improve the accessibility to charging points will help to speed up the EV adoption, which will then boost demand for lithium batteries. It is a major growth opportunity for startup companies that are developing high-capacity battery solutions for both EV fleet and grid storage applications.
Market Trends in the Lithium Battery Industry
Several fundamental market trends are emerging to direct the growth of Indian lithium battery startups as the nation strengthens its battery manufacturing sector.
Localization of Supply Chains
The significant transformation in the market involves having supply chains focus on local operations. India strives to achieve battery production independence under prevailing global trade uncertainties. Companies are encouraged to:
– Secure lithium resources through local mining partnerships.
– Invest in recycling technologies.
Essential battery components like electrolytes along with cathodes should be manufactured within the factory lines. The competitive edge belongs to startup companies which unite their supply chain operations locally within domestic territories.
Growing Demand for Energy Storage Systems (ESS)
Lithium batteries operate in various applications beyond electric vehicles because they are now utilized in several different sectors.
– Solar and wind power storage.
– Industrial backup systems.
– Telecom power solutions.
The Indian government has set a target to reach 500 GW of renewable energy capacity by 2030 and this requires a significant rise in grid-scale battery storage solutions demand. Startups which create affordable energy storage methods will discover an expanding market opportunity.
Rise of Battery-as-a-Service (BaaS) and Battery Swapping
The business model called Battery-as-a-Service (BaaS) and battery swapping is becoming increasingly widespread in the market. Consumers as well as businesses now have the alternative of leasing batteries together with the option to exchange them.
The quick battery replacement system proves beneficial for two-wheeler and three-wheeler electric vehicle usage because it enables faster service durations and improved ease of management.
- Reduce downtime
- Increase convenience
Companies which introduce modular lithium batteries with swapping capabilities will establish an impressive market presence.
Public-Private Collaboration
The government partnership with the private sector drives the industry’s expanding market. By fostering partnerships between:
- Startups
- Research institutions
- Large industrial players
The Indian government takes action to keep the nation leading in battery innovation and manufacturing.
