India is on track to achieve 90-100% localisation of electric vehicle manufacturing by 2030, according to industry estimates. The country's annual EV sales have surged nearly 14-fold since FY2020, creating significant opportunities for domestic manufacturing and reducing dependence on imports.
Rapid sales growth fuels localisation push
India's EV market has expanded dramatically, with annual sales rising from around 1 lakh units in FY2020 to over 14 lakh units in FY2025. This growth has spurred investments in local production of batteries, motors, and electronics. The government's Production Linked Incentive scheme for advanced chemistry cell batteries is expected to boost domestic cell manufacturing, a key component for achieving high localisation.
According to a report by the India Energy Storage Alliance, the country's EV battery market is projected to grow to $15 billion by 2030, with local production capacity increasing tenfold. Major automakers like Tata Motors, Mahindra & Mahindra, and Ola Electric have committed to expanding local sourcing.
Government policies and industry response
The Faster Adoption and Manufacturing of Electric Vehicles scheme has provided demand incentives, while state-level policies offer subsidies for manufacturing plants. The government has also imposed higher import duties on fully assembled EVs to encourage domestic assembly. Industry body SIAM estimates that localisation levels for two-wheelers have already reached 70%, while four-wheelers are at 50%.
“India could achieve 90-100% localising of EV manufacturing by 2030 if current trends continue,” said an industry analyst. “The ecosystem is developing rapidly, with component makers scaling up and global players setting up R&D centres.”
Challenges and opportunities
Key challenges include high initial costs for battery manufacturing and reliance on imported lithium, cobalt, and nickel. However, India is exploring domestic sources and recycling. The government is also promoting sodium-ion and solid-state battery research to reduce import dependence.
The localisation push is expected to create over 5 million direct and indirect jobs by 2030. Automakers are investing in local assembly of power electronics, thermal systems, and software. For example, Tata Motors has localised over 60% of its Nexon EV components and plans to increase this to 80% by 2027.
Impact on imports and trade
Reducing imports of EV components from China and other countries will improve India's trade balance. Currently, India imports about 70% of its EV battery cells. With local cell production ramping up, this share could drop to 30% by 2030. The government aims to make India a global EV manufacturing hub, targeting 30% EV penetration in new vehicle sales by 2030.
In conclusion, India's rapid EV adoption and policy support are driving a historic shift towards self-reliance in manufacturing, with 90-100% localisation achievable within the decade.
