Batteries to autos: Chinese imports remain in top gear

A battery cell is a single unit that stores and releases electrical energy. A battery pack combines multiple cells with wiring, cooling, safety systems and controls. Packs are the larger units used in electric vehicles and other devices. This distinction matters because assembling packs is easier than developing and manufacturing cells at scale.

The article says Indian battery makers are mostly packing cells imported from China. That means the final battery may be assembled in India, while its most important energy-storing component comes from abroad. China’s large-scale production and cost advantages make those imported cells attractive to Indian assemblers.

India’s production-linked incentive programme has not yet created a large domestic cell-making industry. The article says only a few Indian battery makers have managed to set up after the programme failed to deliver broadly. As electric-vehicle sales grow, imported cells and batteries are therefore likely to remain important unless India builds deeper local manufacturing capacity.

India’s battery imports from China nearly doubled during April-August, reaching $2.9 billion. That made batteries the sixth-largest import item from China during the period. The increase reflects India’s growing need for batteries as electric-vehicle sales expand, while domestic cell manufacturing remains limited.

The wider trade picture is also worsening. India’s trade deficit with China widened to nearly $56 billion during the first five months, compared with $44.7 billion during April-August 2025. The article links this growth to rising imports of electronics, machinery, chemicals, plastics and battery-related goods.

At the reported pace, the deficit is set to exceed the $112 billion recorded for 2025-26. Indian exports to China rose 40%, but they came from a small base and averaged below $2 billion a month during April-August. Much of that export growth consisted of inputs, not a broad reversal of the imbalance.

Electric-vehicle growth increases demand for batteries at the same time that India lacks enough domestic cell-making capacity. So, higher EV sales can raise imports rather than reduce them. The key issue is where the battery’s main components are made, not merely where the final vehicle or pack is assembled.

The article says Indian battery makers are largely packing cells imported from China. As EV sales rise, these assemblers need more cells. China’s dominance in global battery trade means that additional Indian demand is commonly met through Chinese imports. The country’s imports of batteries from China nearly doubled to $2.9 billion during April-August.

This pattern extends beyond batteries. India’s higher production of mobiles, computers and other devices has not reduced Chinese imports of components and inputs. Telecom equipment and electronic components both grew by more than 40% in the first five months, showing that local final production can still depend heavily on imported parts.

China dominates because it produces across the full manufacturing spectrum at very large scale. The article says economies of scale create cost advantages, while subsidies further support Chinese producers. This makes it difficult for India and other countries to compete, especially in batteries, electronics, machinery and chemicals.

China also maintains a firm grip over electronics and telecom value chains. Higher production of mobiles, computers and other devices in India has not reduced imports of Chinese components and inputs. China’s strength therefore lies not only in finished goods, but also in the parts and industrial materials needed to make products elsewhere.

S&P Global chief economist Paul Grunwald said China differs from Japan and Korea because it is filling the entire spectrum rather than moving upward and leaving lower-end production behind. The article says this blocks countries below China from following the same manufacturing path. China’s unwillingness to cede ground keeps dependence high.

A sudden cutoff would expose how much Indian industry depends on Chinese inputs. The impact would not be limited to finished products. Factories making medicines, electronics, machinery, chemicals and electric vehicles could lose essential components or materials needed to continue production.

The article gives batteries as a direct example. Indian battery makers commonly pack cells imported from China, so an interruption could restrict battery assembly and slow EV production or sales. It also reports that telecom equipment, electronic components, chemicals and machinery are major parts of India’s Chinese imports. These supply links run through many industries.

Ajay Srivastava of GTRI said pharma, electronics, machinery and chemicals would be severely hit if China turned off the tap. The immediate problem would be disruption, while the longer-term response would require domestic capacity across industries and deeper local manufacturing. The article says Indian firms often petition when the government introduces import checks, showing how sensitive these sectors are.

India can reduce dependence by making more battery cells, electronic components, machinery inputs and chemical materials at home. The article’s central recommendation is to create domestic capacity across industries and deepen local manufacturing. This would address dependence at the component level, not just by assembling finished products in India.

The battery example shows why this matters. Indian companies can currently assemble packs, but many import the cells from China. A stronger domestic cell industry would allow EV growth to create local demand for locally made inputs. In wider manufacturing, producing components and industrial materials would similarly reduce the need for Chinese imports.

India could also diversify suppliers, an established trade-policy option, but the article does not identify specific alternative countries or programmes. It stresses that replacing Chinese goods is difficult because of scale, subsidies and China’s control across the value chain. Building capacity will therefore take time, investment and broader manufacturing depth rather than a simple shift in suppliers.

A trade deficit occurs when the value of a country’s imports from a trading partner exceeds the value of its exports to that partner. It is measured through trade flows, not simply through how much a country manufactures. A country can produce more goods and still run a larger deficit if it buys more from abroad.

India’s electronics industry illustrates the mechanism. More mobiles, computers and other devices are being produced in India, but their components and inputs are still imported from China. If those imports rise faster than India’s exports, domestic production can expand while the bilateral trade gap widens. The same logic applies to batteries, machinery, chemicals and plastics.

The article says India’s China deficit reached nearly $56 billion, compared with $44.7 billion in the comparable period, and could exceed $112 billion for 2025-26. Indian exports rose 40%, but from a small base and largely as inputs. Thus, manufacturing growth does not automatically mean import dependence is falling.