By Amit Kapoor and Meenakshi Ajith
India’s battery ambition is usually discussed as a manufacturing problem. Forty gigawatt hours of cell capacity awarded, 1.4 commissioned, the rest still largely land. But the constraint that binds first will not be the factory. From April 2027 every battery made in India must contain recycled material recovered inside the country, and whether the cells get built matters less than whether anyone here can yet say what a used battery is worth.
The requirement states that five per cent of a battery’s dry weight in the first year, rising to twenty by 2030-31, should be drawn from batteries processed inside the country rather than bought in as recovered stock The thinking behind it is straightforward; India imports nearly all of its lithium and cobalt and spent over ₹34,000 crore on critical mineral imports in 2023-24, and material pulled out of a dead battery is the only supply of these inputs that needs neither a new mine nor a secure shipping lane. The Ministry of Mines has backed the same idea with a ₹1,500 crore scheme targeting 400 kilotonnes of recovered material, under which 58 companies were cleared in June. Between them, the rule and the scheme turn end-of-life batteries into something closer to procurement than disposal, which is what separates this from the familiar arguments about solar modules and wind blades. There the question is where the waste goes, but here it is where the inputs come from.
What the rule assumes, and what nobody has built, is a way of grading what comes back. The rules themselves put a number on it. A pack retaining more than seventy per cent of its original capacity may be stripped to its modules and sold into stationary storage rather than shredded, provided the use is declared. That threshold decides whether a retired battery is inventory or scrap, and what it sells for. India has no recognised domestic standard for establishing it. The relevant Indian standards are written for new product, and the international references, UL 1974 and the IEC 62933 series, have no domestic equivalent. Fewer than a dozen accredited laboratories in the country can handle megawatt-scale storage testing, with waiting times running to several months.
The absence already has a price, and it will be paid by those least able to bear it. A lender who cannot value a used battery cannot value the vehicle built around one, which is why the drivers carrying the electric transition from below borrow at rates that can reach a third of the loan. The rule arriving in 2027 does not create this problem, but it does give us a deadline to meet.
It also forces a choice India has so far avoided making, because the two available paths compete for the same material. Repurposing adds six to ten years of working life before a pack is finally recycled, which means every battery redeployed into a telecom tower or a rural microgrid is one whose lithium does not reach a recovery plant until the middle of the next decade, precisely when the recycled-content obligation steps up to twenty per cent. Shredding it immediately solves the feedstock problem and destroys storage the country badly needs. The Ministry of Power told Parliament last month that it expects 34 gigawatt hours of battery storage by 2026-27 and 236 by 2031-32, backed by ₹3.49 lakh crore, and the economics beneath that commitment are not yet steady. Storage tariffs have fallen by roughly 86 per cent in under three years, yet close to three-quarters of allocated two-hour capacity is judged financially at risk, with discoms holding back contracts in the expectation of further falls. Cheap second-hand storage is worth a great deal in a market like that. India is currently encouraging both paths without indicating which it wants first, or when.
None of which means second life scales on its own. Refurbished packs have to undercut a new-cell price that keeps falling, grading is slow work that consumes the margin, and the informal dismantler will always win on cost while destroying the residual value the rules were written to protect. These are symptoms of an absent standard rather than an argument against the prize. A market in second-life storage is worth having twice over, once as cheap grid capacity and once as collateral a lender can price. Neither materialises until somebody can certify what a used pack holds.
The export side removes any ambiguity about whether this is optional. From February 2027, every electric vehicle battery and every industrial battery above two kilowatt hours entering the European market must carry a digital passport recording its chemistry, carbon footprint, recycled content and state of health, with minimum recycled-content thresholds following in 2031. Indian manufacturers will need auditable lifecycle records whatever the domestic market decides. Auctions worked because the question was simple and the answer was a price. Nothing about the next set of questions reduces that way. Knowing what a used asset is worth requires laboratories, a standard, a registry, and firms willing to stand behind a number for a decade, none of which can be tendered into existence. India has about eighteen months. The country that is learning to build these cells will have to learn, rather faster, how to read the ones it gets back.
(Amit Kapoor is chair and Meenakshi Ajith is development policy lead with Institute for Competitiveness. X: @kautiliya).
The article was published with Business World on September 3, 2026.
