Following the MoU, Munoth plans to increase its capacity by five-folds to meet demand for 2 million cells a month.The US-China tariff war is already proving to be beneficial to India's electronics manufacturing industry. Following Apple's shift away from China to turn India into the second-largest iPhone producer, lithium-ion cells will also be sourced from India.
US-based Anker has signed a pact with Chennai-based Munoth Group to source lithium-ion cells from India, after the Joe Biden administration imposed a 25% duty on lithium cells imported for consumer electronics from 2026.
Munoth's 270 MWh facility in Andhra Pradesh will start exporting a million lithium cells every month to Anker as part of a 5-year deal. The company is in the process of setting up additional testing equipment and increasing its capacity, calling it a big win for the nascent battery manufacturing industry in India.
"The newly incorporated battery production plant will supply a million lithium cells to a leading power bank brand in the US. So far, this customer was serviced by Chinese suppliers. This is a direct fall out of the 25% tariff imposed by the US on China for lithium cells for consumer electronics from 2026," Jaswant Munoth, vice chairman, Munoth Industries, told ET.
He said supplies will start from the second quarter of 2025, adding the order will help infuse confidence among local brands to start sourcing batteries locally from India. The Andhra-Pradesh based facility currently has a capacity to produce 500,000 cells a month. Following the MoU, Munoth plans to increase its capacity by five-folds to meet demand for 2 million cells a month.
The executive said customers of top Chinese suppliers are now eyeing the Indian market to offset cost disabilities arising from high duties imposed on imports from China.
"Customers of our collaborator, which is among the top three lithium ion suppliers from China, wanted to check if India can supply lithium-ion cells because 25% is too high a tariff, and Donald Trump is threatening to increase it to 35%. That is why they have started looking at non-Chinese suppliers," Munoth said.
The critical component is expected to be included in the government's upcoming financial support package for electronics components. Manufacturers expect a host of capital and operational support as part of the scheme.
A CII report had highlighted a 13-15% cost disability in making lithium-ion cells in India as compared to China and Vietnam.
According to India Cellular and Electronics Association (ICEA), India is currently importing an average of 1.5 million lithium-cells of 10,000 mAh capacity from China for use in digital applications every month, indicating an urgent need to localise the component.
