India’s Renewable Energy Push Deepens Reliance on China

India is attempting to expand its renewable energy network to support its growing industrial economy, but the effort is deepening its dependence on battery imports from neighboring China. Draft regulations proposed by India’s Central Electricity Authority would make energy storage compulsory for future government solar and wind projects, threatening to expand Beijing’s influence over New Delhi’s power infrastructure.

Grid Expansion and Storage Deficit

Data from Indian government think tank Niti Aayog indicates that solar and wind installations now account for more than 40 percent of total electricity generation capacity in India, putting clean energy infrastructure nearly on par with coal-fired power plants. However, weather-dependent generation leaves actual power delivery inconsistent. In the fiscal year ending March 2026, coal generated nearly 70 percent of India’s electricity, while solar and wind contributed slightly over 15 percent.

To stabilize power supplies, the Central Electricity Authority published draft rules requiring all new state-backed solar and wind projects commissioned after July 2027 to incorporate battery storage systems. The batteries will store excess power generated during off-peak hours and dispatch it when demand rises. Ray Tay, an executive director at Moody’s Ratings, noted that energy storage mitigates “curtailment risk,” which occurs when renewable facilities are required to reduce generation because the electrical grid cannot absorb the load. Tay noted that “solar and wind availability varies by time of day, weather and season,” adding that storage systems help stabilize revenue for power producers.

Heavy Reliance on Chinese Imports

While storage is essential to balancing the grid, India’s domestic battery production remains negligible. Figures from market research firm Wood Mackenzie show domestic manufacturing accounts for less than 1 percent of India’s estimated 260 gigawatt-hour demand pipeline for competitive tenders in 2026. Approximately 80 percent of energy storage batteries used in India originate from China, with the remaining 20 percent supplied by South Korea and Taiwan.

Wood Mackenzie estimates it could take more than ten years for India to develop substantial domestic battery manufacturing capacity. Indian companies currently focus on downstream assembly, testing, or EV battery production, which receives direct government subsidies. S&P Global Energy estimates China controls over 80 percent of global capacity across key battery supply chain components. Ashish Singla, a director at S&P Global Energy, stated that India’s domestic cell manufacturing capacity could reach 140 gigawatt-hours if mineral sourcing and recycling policies proceed as planned.

Geopolitical Risks and Industrial Ambitions

The reliance on foreign components comes as Prime Minister Narendra Modi positions India as an alternative manufacturing hub to China. Expanding domestic chip production, artificial intelligence firms, data centers, and smartphone assembly for companies such as Apple requires consistent electricity. In an Independence Day address, Modi stated that “energy security is the need of our times,” adding that “it is becoming increasingly difficult to run the new world without energy.”

However, trade analysts warn that battery dependency exposes New Delhi to economic leverage. Ankita Chauhan, a director at Wood Mackenzie, described China’s market position as a “critical advantage,” noting Beijing has previously used resource supply as a “geopolitical tool” in commercial negotiations. Diplomatic relations remain tense despite a meeting between Modi and Chinese President Xi Jinping in Tianjin. Indian business executives continue to face delays obtaining Chinese visas, while Beijing remains cautious regarding technology transfers that could build competing supply chains in India.

Background

India is the world’s third-largest producer and consumer of electricity. To balance trade and security concerns, New Delhi has tightened import restrictions on foreign goods where domestic production exists, while selectively easing investment rules for Chinese businesses. However, China’s widespread control over raw material refining and battery manufacturing leaves global clean energy transitions exposed to price swings and export controls.