Reliance Halts Battery Cell Manufacturing Plans after China Tech Deal Fails

Reliance Industries Limited (RIL) has put its plans to manufacture lithium-ion battery cells in India on hold after failing to secure technology from a Chinese partner. Notably, the company had planned to begin cell manufacturing this year.

Reliance was unable to finalise a technology licensing agreement with China’s Xiamen Hithium Energy Storage Technology, a supplier of lithium iron phosphate (LFP) battery cells, The Economic Times citing sources.

The talks reportedly collapsed after the Chinese firm withdrew from the proposed partnership amid tighter restrictions by China on overseas transfers of sensitive technologies. China has stepped up scrutiny of clean-energy technology deals in recent years as it seeks to safeguard its strategic advantage in sectors such as batteries, electric vehicles and renewable energy equipment.

Following the setback, Reliance has shifted its focus to assembling battery energy storage systems (BESS), which are large containerised battery units. It is doing that mainly for use in its own renewable power projects, instead of producing battery cells domestically, the report added.

The pause in cell manufacturing highlights broader challenges facing India’s clean-energy ambitions. Companies expected to help deliver the government's goal of making India carbon-neutral by 2070 continue to face technology bottlenecks, particularly due to limited access to affordable and scalable battery technologies, the report said,

In August 2025, Reliance chairman Mukesh Ambani told shareholders that the company’s battery gigafactory would begin operations in 2026. The halt in the cell-making component of its broader battery plans is not expected to have an immediate financial impact on the conglomerate.

ET's report added that Reliance explored alternative battery technologies from Japan, Europe and South Korea. However, these options were found to be significantly more expensive and less competitive for large-scale deployment in India.

Notably, China’s dominance over the global critical minerals supply chain remains a key factor. It refines between 47% and 87% of key materials such as copper, lithium, cobalt, graphite and rare earth elements, according to the International Energy Agency, cited by Reuters. These minerals are essential for batteries, semiconductors, clean-energy technologies and military equipment.

The developments come at a time when India and several other countries have been invited to a meeting of finance ministers from the Group of Seven (G7) nations, hosted by the United States, to discuss critical minerals supply chains. Union Minister Ashwini Vaishnaw is visiting the US to participate in the meeting.

US Treasury Secretary Scott Bessent earlier told Reuters that the country has been pushing for focused discussions on critical minerals since the G7 leaders’ summit last summer, citing growing concerns over supply disruptions.

Western countries, including India’s partners in the G7, are increasingly seeking to reduce their dependence on China. The urgency has grown after reports that the country tightened export controls on certain rare earths and restricted shipments of powerful magnets and other dual-use items to Japan.