Mukesh Ambani's plans of lithium-ion battery cell manufacture under its Rs 75000 crore 'New Energy' investment hits roadblock, here's why

Mukesh Ambani-led Reliance Industries has halted lithium-ion battery cell manufacturing plans in India after negotiations with a Chinese technology partner failed. The setback comes when India struggles to localise clean-energy supply chains amid China’s tightening controls on technology transfers. The company had reportedly planned to begin cell manufacturing this year, as part of its larger Rs 75,000 crore ($10 billion) "New Energy" ecosystem plan.  

However, Reliance has said that there has been no change in plans. "Reliance Industries strongly and categorically affirms that there has been no change in our plans for creating a world-leading battery storage manufacturing ecosystem from Cell to containerised ESS (energy storage system) and that they are progressing well in line with our target timelines," a company spokesperson said in an email to Reuters.

Why did Reliance pause lithium-ion battery cell manufacture in India?

According to the Economic Times, Reliance was unable to finalise a technology licensing agreement with China’s Xiamen Hithium Energy Storage Technology, a supplier of lithium iron phosphate (LFP) battery cells. The development comes after India joined G7-led discussions to reduce dependence on China for critical minerals and battery inputs. According to the reports, the talk stalled after Xiamen withdrew from the proposed partnership amid China's curbs on overseas technology transfers in key sectors. This prompted Reliance to refocus on assembling battery energy storage systems, the report said.

Reliance had committed to invest Rs 75000 crore in a comprehensive new energy and new materials ecosystem. This investment is a key part of the company's goal to become a net-zero carbon company by 2035. "Through active investments and partnerships and by building a scalable and enabling energy ecosystem, we aim to build one of the world's leading New Energy and New Materials businesses that can bridge the green energy divide in India and globally. The business will be based on the principle of Carbon Recycle and Circular Economy with a portfolio of advanced and speciality materials. We aim to create a fully integrated manufacturing ecosystem with secure and self-sufficient supply chains," said Reliance. 

"Our New Energy and New Materials business is uniquely positioned to address India’s ‘Energy trilemma’—affordability, sustainability, security—with the production of Green Energy, " added Reliance.