Startup Originals Team
Reliance Industries has put its plan to manufacture lithium-ion battery cells in India on hold after failing to secure critical technology from a Chinese partner, underscoring challenges in building a domestic clean-energy supply chain. The Mukesh Ambani-led conglomerate is now shifting focus to assembling battery energy storage systems amid tightening controls on overseas tech transfers.
Setback in Securing Chinese Technology
Reliance had been pursuing a major initiative to establish lithium-ion battery cell production in India, aiming to begin operations this year as part of its clean-energy transition efforts. The company entered discussions with Chinese supplier Xiamen Hithium Energy Storage Technology Co. to license lithium iron phosphate (LFP) cell technology, a key component for advanced battery manufacturing. However, the talks collapsed after the Chinese firm withdrew from the proposed partnership amid Beijing’s tighter restrictions on overseas transfers of strategic clean-energy technologies.
The failed negotiations highlight ongoing barriers to accessing advanced battery technology, particularly as China remains a dominant global player in lithium-ion cell production and is increasingly cautious about exporting core technical know-how.
Shift to Battery Energy Storage Systems
Faced with the technology hurdle, Reliance has recalibrated its strategy. Instead of proceeding directly with full-scale cell manufacturing, the company is now prioritizing the assembly of battery energy storage systems (BESS) and battery pack production. These systems, large-scale containers of battery units, are used to store electricity generated from renewable sources such as solar and wind, and are considered critical for India’s growing clean-energy infrastructure.
Industry observers note that this shift mirrors broader trends among Indian conglomerates, who are investing in battery storage assembly while postponing or scaling back plans for indigenous cell manufacturing due to technology and supply chain constraints.
Implications for India’s Clean-Energy Goals
Reliance’s pause in lithium-ion cell production comes as India aims to reduce dependence on imports for clean-energy technologies and accelerate its transition to a net-zero economy by 2070. The setback underscores the complexity of localizing advanced battery manufacturing, an area long dominated by Chinese firms that benefit from established supply chains and deep technical expertise.
The Indian government has supported domestic battery capacity through schemes such as the Production-Linked Incentive (PLI) program, offering substantial subsidies to companies that develop local manufacturing capabilities. However, Reliance and other firms have encountered challenges meeting technology milestones and localization targets under such frameworks.
Despite the pause in one segment of its battery strategy, Reliance has reaffirmed its overall commitment to building a comprehensive battery ecosystem in India, including energy storage systems and battery packs, with the potential to revisit cell production once technology access issues are resolved.
Industry and Policy Reactions
Experts say that Reliance’s experience reflects broader global supply chain pressures and the strategic implications of technology export controls. China’s tightening of regulations on clean-energy tech exports , including battery components and manufacturing knowledge, is reshaping international collaboration and forcing companies outside China to explore alternate pathways or delay advanced manufacturing plans.
For India’s burgeoning clean-energy sector, the focus may increasingly shift toward building robust capabilities in areas such as battery pack integration and energy-storage deployment, which remain crucial for renewable power adoption even as full cell production remains challenging.
