The next frontier in India’s energy transition: Building a circular battery ecosystem

This article was first published on 18^th August 2026 in The Economic Times Edge Insights.com. Please click here to read the article.

Today India’s electric mobility and energy storage ecosystem is entering a phase of rapid expansion. The increasing adoption of EV, expansion of renewable energy capacity and rising deployment of battery energy storage systems are driving strong demand for lithium-ion batteries and the critical minerals that power them, such as lithium, nickel, and cobalt. However, India continues to rely heavily on imports, exposing the value chain to supply disruptions, price volatility, and risks associated with highly concentrated global supply chains.

The scale of future demand highlights this challenge. India is targeting nearly 220 GWh of announced domestic cell manufacturing capacity by 2030. While a lot of focus has been on expanding battery manufacturing, an equally important parallel question is emerging: How will the battery materials required for this expansion be secured over the long term?

In response, battery recycling is rapidly emerging as a strategic priority globally. Countries across Europe, North America, and Asia are increasingly treating end-of-life batteries not as waste but as a valuable secondary source of critical minerals, that can be recovered and reused. Recycling ecosystems developed by major global players are integrating collection, shredding, black-mass recovery, hydrometallurgical processing, and refining into circular supply chains that return recovered materials into battery production.

This shift reflects a growing recognition that end-of-life batteries are a valuable source of critical materials. As battery adoption rises, recycling is becoming increasingly important not only for sustainability but also for enhancing resource security and supply chain resilience.

For India the opportunity extends beyond establishing recycling facilities. The more important challenge will be that of developing an ecosystem capable of recovering battery materials efficiently and recirculating them into domestic manufacturing supply chains.

A key differentiator will be technology selection. Recycling pathways such as shredding and hydrometallurgy are widely adopted due to their high recovery rates, product purity and economic viability. As battery chemistries evolve and LFP batteries become increasingly dominant, value creation will shift towards technologies capable of recovering battery-grade lithium salts and cathode materials at high yields and purity levels.

We are also seeing technology capabilities increasingly being built through partnerships. Across global markets, recyclers are now collaborating with battery manufacturers, OEMs and technology providers to improve recovery efficiencies and accelerate commercialisation. As advanced refining and hydrometallurgical capabilities remain concentrated among a limited set of players, access to technology may become as important as access to feedstock.

Feedstock is emerging as a critical success factor for the battery recycling ecosystem. India’s EV battery demand is expected to grow from 20 GWh in 2025 to 200 GWh by 2032, creating a substantial future stream of end-of-life batteries. As battery volumes increase, India’s Extended Producer Responsibility(EPR) regime is strengthening the collection and recycling ecosystem by obligating producers to meet recycling targets through certified recyclers, making collection networks, reverse logistics, traceability platforms and EPR mechanisms integral parts of the battery circularity value chain.

An equally important development is the emergence of Battery-as-a-Service (BaaS) and battery ownership models. Under BaaS, battery ownership remains with OEMs, fleet operators or service providers rather than vehicle owners. This improves visibility into battery health, utilisation, and end-of-life availability while creating a more predictable feedstock pipeline for recyclers.

Location strategy is another important consideration. As India’s gigafactory ecosystem expands, clustering recyclers near manufacturing hubs can reduce logistics costs, and enable recovered materials to flow more efficiently back into production.

Recycling is increasingly moving from a waste-management function to a strategic raw material source. Yet the scale challenge remains significant. Even with announced recycling capacities, recovered materials are expected to meet only a small portion of the mineral requirements of the country’s planned gigafactory pipeline. The future battery ecosystem will therefore depend on a combination of recycling, domestic mineral development, refining capabilities, and international supply partnerships to bridge the material gap.