The Missing Middle Behind India's Battery Challenge: A Response to Swarajya

Raghavan Rao's article in Swarajya on Indian conglomerates' battery retreat, published yesterday, is sharp and well-documented. The reactions to the article post and thread on X are predominantly concerned and critical, aligning with the post's warning about India's battery/EV sector becoming "born dependent" on China (especially for cells, chemistry, and upstream materials). Many users view it as a cautionary tale of policy execution gaps, corporate risk-aversion, and geopolitical vulnerability — shifting from petroleum import dependence to battery-material import dependence. 

The article's core observation is accurate: companies that announced battery sovereignty ambitions between 2021 and 2023 have, by 2026, largely settled into assembling Chinese cells into Indian enclosures. The contrast with Korean and Japanese firms — who paired technology licensing with sustained, long-horizon R&D investment and gradually converted external knowledge into indigenous capability — is historically fair. The arithmetic on CATL's R&D expenditure versus Indian conglomerate R&D budgets is damning, and worth stating plainly. The piece performs a genuine diagnostic function, and its central discomfort with India's pattern of choosing the cheaper half of the industrial playbook is well-founded.

But the diagnosis is incomplete in two respects — one methodological, one analytical — and the prescription that follows from it understates the problem in ways that matter for policy.

A Basic Journalistic Gap

A piece that characterises corporate strategic intent—retreat, failure, abandonment—without seeking comments from the companies in question - is working with incomplete information. Rao/Swarajya, as far as the published article reveals, did not approach Reliance Industries, Adani Enterprises, JSW, or the other conglomerates it discusses - for their responses. This is not a minor procedural omission. It is a basic journalistic duty that Rao/Swarajya failed to do — especially for a piece that makes specific claims about what these companies have decided, concluded, or given up on.

R&D pipelines in deep industrial chemistry do not produce publicly reportable outcomes on quarterly cycles. A company may be running active pilot programmes, funding collaborative research with institutions, or exploring process engineering partnerships — none of which would be visible to a journalist working from foreign media narratives, press releases, and market disclosurs alone. The absence of public announcements is not the same as the absence of activity. Swarajya's framing — that these companies have retreated — assumes the worst without giving its subjects the opportunity to respond or correct the record. That weakens an otherwise well-researched piece, and readers should hold its characterisations of corporate intent with appropriate scepticism.

An Overdrawn Technology Picture

The Swarajya piece comes close to eulogising Chinese battery technology as the unreachable frontier that India has failed to approach. CATL and BYD are presented as industrial paragons — the standard against which Indian ambition must be measured and found wanting. That picture requires significant qualification.

Chinese battery manufacturing is not a monolith. The gap between CATL's best cells — produced in its most advanced facilities, for its most demanding customers — and the average quality across China's broader battery manufacturing ecosystem is substantial and increasingly well-documented. Thermal runaway incidents involving Chinese electric vehicles have been widely reported across multiple markets: BYD cars and other Chinese-branded vehicles catching fire spontaneously in parking lots, showrooms, and while in transit, sometimes spreading to adjacent vehicles. These are not isolated incidents attributable to user error. They reflect systemic problems in battery management system design, pack engineering, thermal management architecture, and manufacturing consistency — precisely the middle layers of industrial capability where quality control is hardest to maintain as production scales rapidly.

The underlying issue is instructive. China built scale at extraordinary speed. It did not build uniformly. The institutional and process engineering infrastructure required to ensure consistent quality across a manufacturing ecosystem of China's size takes longer to develop than the factories themselves. The result is a battery industry that is genuinely world-leading at its best and genuinely problematic at its median.

India's strategic ambition should, therefore, not be framed as replicating what China built. It should be framed as building more reliably than the average of what China built — a target that is simultaneously more honest about China's actual record and more achievable for a country that is better positioned to build quality into its industrial systems from the outset than to retrofit quality into systems optimised for speed and scale.

Where the Prescription Falls Short

Rao's prescription — that Indian conglomerates should commit one percent of energy capex to battery R&D, redirect capital from procurement into chemistry, and do for batteries what Reliance Jio did for telecom — points in the right direction. R&D investment is necessary. But it is not sufficient, and understanding why it is not sufficient requires a clearer account of what the binding constraint actually is.

The SCL Mohali example offers the sharpest available illustration. Since 2022, the Chips to Startup (C2S) programme has trained 85,000 engineers and funded the design of more than 175 custom chips. It produced genuine design capability, distributed across academic institutions and startups, at a scale India had never previously achieved in semiconductors. Yet for three years, a fundamental question hung over the entire programme: where do these designs actually get fabricated in India? The designs existed. The engineers existed. The knowledge existed. But without pilot-scale fabrication infrastructure — the translation layer between design and manufactured silicon — C2S produced graduates and GDSII files, not chips. The SCL Mohali upgradation is significant precisely because it resolves that gap: it provides the fabrication bridge that converts design capability into manufacturable technology.

The battery parallel is direct and uncomfortable. Suppose Indian conglomerates respond to Rao's prescription and commit serious capital to battery R&D. Suppose a research team at a Reliance-funded programme, working with IIT Madras or IISc Bangalore, develops a promising cell chemistry — better thermal stability, higher energy density, lower cost at scale. The next questions are the ones that matter industrially: Who pilots it? Who validates the manufacturing process at the hundred-kilogram batch scale required to assess commercial viability? Who certifies the materials for use in manufactured cells? Who stress-tests the pack design under real operating conditions before it reaches a production floor? Without pilot-scale synthesis facilities, process engineering infrastructure, and materials validation ecosystems, the answer to each of these questions is: nobody in India. The R&D investment produces a paper, perhaps a patent, and eventually a licensing conversation with a foreign manufacturer. It does not produce a cell.

This is the structural argument the Swarajya piece reaches toward but does not fully articulate. The binding constraint on India's battery ambition is not the absence of chemistry knowledge. It is the absence of the translation infrastructure between knowledge and production — and R&D investment, without that infrastructure, cannot bridge the gap.

What China Actually Built

China's battery dominance is not primarily the product of R&D investment, though R&D investment was substantial. It is the product of ecosystem construction — a distinction that sounds subtle but is industrially decisive.

CATL and BYD emerged through the patient accumulation of capability across the entire production stack: critical mineral geology and extraction, refining and chemical processing, cathode and anode materials synthesis, separator and electrolyte production, precursor chemical ecosystems, pilot-scale manufacturing infrastructure, process engineering institutes, industrial clustering, testing and certification systems, and eventually the recycling and second-life deployment layers that close the material loop. Each of these layers took years to develop. Each created the tacit knowledge and institutional continuity that allowed the next layer to develop faster. The manufacturing learning embedded in CATL's production processes — accumulated across millions of production cycles, in the hands of process engineers, in the institutional memory of manufacturing institutes, in the supplier density of industrial parks — cannot be replicated by writing a research cheque. It is path-dependent. You cannot skip the path.

Reliance's acquisition strategy between 2021 and 2025 is best understood as an attempt to buy its way across this missing middle — to shortcut the translation infrastructure by acquiring foreign intellectual property and transplanting it to Jamnagar. Faradion's sodium-ion chemistry, Lithium Werks' LFP patent portfolio, the Ambri liquid-metal long-duration bet: each was a wager that IP acquisition could substitute for the slow, unglamorous work of building process engineering capability, pilot infrastructure, and materials ecosystems domestically. The wager failed — not primarily because China imposed export controls, though that accelerated the reckoning, but because IP without translation infrastructure cannot become manufacturing at scale. Sheffield electrochemists in a UK research facility do not build a gigafactory in Gujarat. Knowledge that cannot be translated into process, process that cannot be validated at pilot scale, and pilot results that cannot be certified for production are not industrial assets. They are expensive options that expire.

This is what India has repeatedly underbuilt — not knowledge, not capital, not ambition, but the middle layers that convert all three into manufactured output.

Assembly and R&D Are Not Alternatives — They Are Obligations

The Swarajya piece, in its legitimate frustration with Indian conglomerates' retreat, implicitly frames assembly and R&D as an either/or choice — as though a company that assembles Chinese cells has by that decision foreclosed the path toward indigenous capability. That framing is analytically mistaken, and acting on it would be strategically damaging.

India cannot afford to wait for capability translation infrastructure to mature before deploying batteries at scale. Two demand-side realities make immediate market entry not merely defensible but urgent. India's renewable energy capacity has expanded way more than its storage infrastructure. Solar and wind installations that cannot store power efficiently generate grid instability, curtailment losses, and investor hesitation — problems that compound with every gigawatt added without corresponding storage. Simultaneously, India's electric vehicle ecosystem — two-wheelers, three-wheelers, small commercial vehicles — is generating battery demand at a scale that, if met entirely through imports, creates a structural current account vulnerability precisely in the sector the government has identified as strategically critical. These are not future problems. They are present ones, and they demand present solutions.

Assembly, in this context, is not a failure. It is a necessary first response to an urgent market reality — one that generates revenue, builds deployment capability, creates maintenance and service ecosystems, and establishes the operational learning that eventually feeds back into better manufacturing. The problem is not that Indian conglomerates are assembling batteries. The problem is assembly without a visible, committed, time-bound R&D and translation pipeline running alongside it. The two tracks must proceed simultaneously: assembly to address the immediate demand gap while R&D and translation infrastructure to build long-horizon capability. Treating them as sequential — first achieve sovereignty, then deploy at scale, or conversely, first assemble profitably, then worry about R&D — is a false choice that India cannot afford in either direction.

There is a third dimension to this argument that the Swarajya piece misses entirely: the employment case for immediate and deep entry into the battery ecosystem. A national battery industry — spanning critical mineral processing, cell manufacturing, pack assembly, battery management systems, recycling, and second-life deployment — has the structural characteristics that India's employment challenge most urgently requires. It generates jobs that are geographically distributed rather than concentrated in a handful of metropolitan centres. It creates employment across the full skills pyramid — from semi-skilled assembly and maintenance workers at the base, through diploma-level process technicians and quality engineers in the middle, to materials scientists, electrochemists, software engineers, and systems architects at the top. The skills acquired at each level of this pyramid are not battery-specific in ways that trap workers within a single sector: process engineering knowledge transfers to pharmaceuticals and chemicals; battery management software expertise transfers to industrial IoT and energy systems broadly; electrochemistry knowledge transfers to fuel cells, supercapacitors, and advanced materials. Battery ecosystem employment is therefore not only numerically significant — it is structurally upwardly mobile and sectorally transferable, with genuine pathways into entrepreneurship for workers who accumulate operational knowledge at the cluster level.

India needs to create hundreds of thousands of jobs across the skills pyramid and across geographies over the coming decade. Few industrial ecosystems offer the combination of immediate deployment scale, geographic distributability, skills diversity, and upward mobility that a national battery industry can provide. This employment case is not ancillary to the industrial sovereignty argument — it is a co-equal reason for urgency, and it argues not for choosing between assembly and R&D but for building both simultaneously, as fast as India's institutional capacity permits.

The Institutional Response India Needs

The missing middle is not a corporate failure alone. It is a public institutional failure, and it requires a public institutional response.

The international precedents are unambiguous. Germany's Fraunhofer Institutes perform the pre-competitive translation function across virtually every industrial vertical — moving discoveries from laboratory demonstration through process validation to manufacturable technology, at a scale and consistency that no single private firm would fund because no single firm can capture the returns. South Korea's KITECH and KIST perform equivalent functions in advanced materials and manufacturing process engineering. Japan's NEDO funds exactly this kind of long-horizon, pre-commercial translation work as a deliberate state commitment to industrial continuity. Taiwan's ITRI did not merely support TSMC — it created the foundry model itself, performing the translation work that allowed a semiconductor industry to emerge from a standing start.

India's equivalent — CSIR laboratories, certain IIT research centres, a handful of DST-funded facilities — exists in fragmented form. It has not been resourced, scaled, or mandated to perform the capability translation function systematically for any specific industrial sector. The result is a scientific base that produces knowledge and a manufacturing base that imports process — with no institutional layer reliably connecting the two.

For batteries specifically, the concrete institutional ask is already articulable. India needs a Grid-Scale Power Hardware-in-the-Loop Facility — a national open-access centre where new cell chemistries can move from laboratory demonstration to pilot-scale process validation, where pack designs can be stress-tested under real operating conditions, where high-efficiency inverters and vehicle-to-grid controllers can be certified, and where microgrid hardware can be demonstrated at industrial scale before it reaches commercial production floors. This facility performs for batteries what SCL Mohali performs for chips: it provides the fabrication and validation bridge that converts R&D investment into manufacturable technology rather than isolated knowledge.

The funding mechanism exists. The ₹1 lakh crore RDI Fund announced in Budget 2025 is precisely the instrument for this kind of pre-competitive public infrastructure investment. The template exists in SCL Mohali. The co-location logic is clear — such a facility should be positioned in one of India's emerging battery manufacturing clusters, where the interaction between the translation institution and the manufacturing ecosystem can compound over time. What is missing is the policy decision to build it.

Corporate R&D investment, when it comes, will be far more industrially productive if it operates within an ecosystem that includes this translation infrastructure. Without it, even well-funded corporate research programmes will continue to produce knowledge that cannot find its way into manufactured products at competitive cost and scale. The two are complements, not substitutes — and India has been investing in neither systematically.

Beyond the Retreat Narrative

Reliance's recalibration toward BESS assembly is a symptom of institutional absence, not its cause. The company may have concluded that competing directly with Chinese cell manufacturers is currently uneconomic, that downstream system integration offers more viable near-term returns, and that the technological absorption timelines for frontier cell chemistry are longer than initially projected. Those conclusions may or may not prove correct commercially. But the larger point is structural: India asked its conglomerates to build frontier industrial capability in a sector where the public translation infrastructure did not exist, and then expressed disappointment when private capital chose the path of lower institutional resistance. That is not a corporate failure. It is a predictable response to an institutional vacuum.

The answer is not to intensify criticism of the retreat. It is to build the infrastructure that would make advance possible — and to hold both the state and industry accountable for their respective roles in that construction. The state's role is to build and fund the translation layer: the pilot facilities, the process engineering institutes, the materials validation ecosystems, the open-access demonstrators that no single firm will build because no single firm can internalise the returns. Industry's role is to co-design that infrastructure, commit R&D investment that operates within it, treat long-horizon capability accumulation as a strategic obligation rather than an optional supplement to procurement-led growth, and — critically — proceed with assembly and deployment at scale now, without waiting for that longer horizon to arrive.

Assembly and R&D are not alternatives. They are simultaneous obligations. The assembly track generates the revenue, deployment scale, operational learning, and workforce base that would sustain the R&D and translation track over the long horizon that frontier battery capability requires. The R&D+translation track would generate the indigenous capability that would prevent the assembly track from becoming a permanent condition of dependence. India needs both, running in parallel, anchored by a public institutional commitment to build the translation middle that neither track can build alone.

Battery sovereignty will not be secured by one gigafactory announcement, nor destroyed by one corporate recalibration. It will be determined by whether India can patiently construct the industrial middle — the translation layers that connect resources, materials science, process engineering, manufacturing, and deployment into one continuous capability ecosystem, while simultaneously deploying at the scale that its energy transition and employment imperatives demand.

That is the deeper challenge the Swarajya piece points toward, even if it does not fully resolve it. The prescription is not corporate R&D alone, nor is it assembly alone. It is both, simultaneously, supported by the institutional infrastructure that makes each productive. That is what China built across two decades. That is what India must now commit to building.