Reliance Pauses Battery Cell Manufacturing Plans Amid Chinese Tech Roadblock

Reliance Industries, the Mukesh Ambani-led conglomerate, has paused its plans to build lithium-ion battery cell manufacturing in India after failing to secure critical technology from China. The company had hoped to start lithium-ion battery cell production this year, partnering with Xiamen Hithium Energy Storage Technology Co., a Chinese supplier. However, the talks collapsed because the Chinese firm withdrew from the deal amid Beijing’s tightened restrictions on overseas technology transfers in the clean-energy sector.

As a result, Reliance has shifted focus from battery cell production to assembling battery energy storage systems (BESS) and battery packs, large containers that store renewable electricity for solar and wind projects. While the pause delays the company’s ambitious battery gigafactory plans, Reliance says its broader energy storage strategy remains on track, with continued investment in BESS infrastructure, battery pack assembly, and eventual cell manufacturing once technology access is secured.

In August 2025, Mukesh Ambani had informed shareholders that the Reliance battery gigafactory was expected to commence operations in 2026. The current setback mainly affects the lithium-ion cell production component of the plan but does not impact Reliance’s immediate financial stability, as the majority of revenue still comes from oil refining, telecom, and retail businesses. Analysts note that the pause reflects larger global supply chain challenges in clean-energy technology, particularly in lithium-ion batteries, where China dominates the cell manufacturing sector and closely controls battery technology exports.

Reliance evaluated alternative cell technologies from Japan, Europe, and South Korea, but found these options significantly more expensive and less competitive for large-scale deployment in India. This experience highlights the difficulty of building an indigenous battery manufacturing ecosystem without access to proven foreign technology. Other Indian players, such as Adani Group and JSW Group, are similarly focusing on battery pack assembly and BESS projects rather than full-scale cell manufacturing due to technology and supply chain bottlenecks.

The Indian government has tried to boost domestic battery production through the Production-Linked Incentive (PLI) scheme, offering subsidies of up to ₹18,100 crore (~$2 billion) for companies that meet capacity targets and local value-addition milestones. These incentives required companies to achieve 25% localization within two years and 50% within five years. However, Reliance faced penalties for missing prior deadlines, demonstrating that policy support alone has not guaranteed rapid lithium-ion cell localization in India.

Despite the challenges in cell manufacturing, the battery storage sector in India is shifting rapidly toward BESS and battery pack assembly, which are crucial for renewable energy projects and energy transition goals. The Adani Group is reportedly planning a multi-billion-dollar BESS project in western India, while JSW Group has launched a 30 MW pilot system in Karnataka. These projects reflect a growing focus on large-scale energy storage, grid stability, and renewable integration as India accelerates its clean-energy transition.

In summary, Reliance Industries has paused lithium ion battery cell production due to failure to access critical Chinese technology, pivoting instead to battery energy storage system assembly. This setback underscores broader technology access issues, supply chain constraints, and the challenges of building a domestic battery manufacturing ecosystem. While PLI incentives and government support are helpful, Reliance’s experience shows that policy alone cannot overcome global technology dependencies, and the focus is now shifting toward BESS and battery pack assembly to support India’s growing renewable energy sector.