How India's Chemical Companies Quietly Moving Into Batteries, Semiconductors

The global transition towards clean energy is pushing industrial demand. Renewable power generation, electric mobility and energy storage have also become active drivers of capital allocation for India's chemical industry. In India, the policy framework has played a decisive role in accelerating this transition.

In the electric vehicle segment, schemes like the Production Linked Incentive programme, the PM e-Drive scheme and a reduced GST rate of 5% have materially improved affordability and adoption. The government's target of increasing EV penetration to 30% of total passenger vehicle sales by FY30 has also created a large market.

This increasing electrification is driving demand not only for lithium-ion batteries, but also for the key raw materials used in battery manufacturing. This is clearly reflected in battery demand projections. CareEdge Ratings estimates that lithium-ion battery demand in India could rise to 54 GWh by FY27 and further to 127 GWh by FY30.

This trajectory also aligns with India's goal of meeting 50% of its energy needs from renewable sources by 2030. As domestic consumption rises, exports of lithium-ion batteries are expected to decline, reinforcing the need to localise upstream components. For chemical companies, this creates an opportunity to supply essential materials in the battery value chain.

Materials such as conductive additives, electrolyte salts, solvents, and anode components sit at the core of battery performance and safety. They require high purity, consistent performance, and long customer qualification cycles. This naturally favours chemical companies with proven expertise.

PCBL Chemicals offers a useful example of how legacy capabilities are being extended. Known primarily for carbon black (used in tyres) and industrial applications, the company is moving into battery-grade conductive materials such as superconducting carbon, nano silicon, and acetylene black.

Nano silicon, in particular, is gaining attention as a next-generation anode material due to its significantly higher energy density compared with graphite. It offers 10 times the energy density of graphite's theoretical capacity. The use of nano-silicon can also increase battery range by 25-100% and increase charging speeds by up to 4X.

Notably, PCBL will be the first company globally to develop these three advanced technologies, positioning it as a key player in ancillary services for EVs and green energy storage systems. PCBL entered the segment through Nanovace Technologies, a joint venture (JV) with Kindia Pty of Australia.

A pilot-scale facility for nano-silicon is under construction at Palej, which is expected to be operational by 2025 end. The facility is expected to be commercialized between FY27-28. PCBL is also setting up a dedicated acetylene black manufacturing facility, a high-conductivity material used in battery electrodes and other advanced applications.

The plant, with an annual capacity of 4,000 tonnes is expected to be commissioned in FY27. To support this expansion, it has entered into a technology transfer agreement with China based Ningxia Jinhua Chemical.

As battery demand scales, the focus is also shifting to the chemistry that controls battery stability, safety, and lifecycle performance. Electrolytes and electrolyte additives sit at the centre of this equation. They influence how a battery behaves over thousands of charge cycles, under heat stress, and at higher voltages. This makes them critical, but also technically demanding.

This is where Neogen Chemicals fits into the battery chemicals landscape. With a long-standing presence in bromine and lithium-based chemistry, Neogen is extending into lithium-ion battery electrolytes and related salts. This shift is driven by the growing need for locally sourced, high-purity electrolyte materials.

Neogen's strategy centres on building an integrated battery chemicals platform. It is setting up a battery chemicals plant in Gujarat, which is expected to become one of India's largest electrolyte manufacturing base. A smaller electrolytes capacity has already been commissioned and is undergoing testing.

Technology access plays a key role in this segment. Neogen has entered into an exclusive technology and licencing partnership with Japan's MU Ionic, a global player in lithium electrolyte. This partnership gives it access to proven chemistries and manufacturing processes. As domestic battery manufacturing scales, such localisation of electrolyte supply could become increasingly relevant.

Alongside electrolytes, certain solvent chemistries are emerging as quiet enablers of battery growth. Dimethyl carbonate is one such material, widely used in lithium-ion battery electrolytes. Producing electronic-grade DMC is materially more complex than industrial-grade production, with tighter controls on impurities and moisture content.

Balaji Amines is addressing this niche by upgrading its existing DMC capacity. The company commissioned a new manufacturing facility in May 2025 to produce electronic-grade DMC specifically for EV battery manufacturers. This makes Balaji the only domestic producer of electronic-grade DMC, positioning it as a key part of the battery supply chain.

While batteries represent the most visible opportunity of the increasing electrification trend, semiconductors are also opening up a parallel opportunity. India's semiconductor ambitions are drawing attention to fabs and assembly plants. But the deeper dependency lies in materials, gases, and process chemicals.

These inputs require extreme purity, consistent batch performance, and long customer qualification cycles, making entry difficult and time-consuming. Acutaas Chemicals is one of the few Indian players building capabilities in this space. Acutaas is traditionally into pharmaceutical intermediates and specialty chemicals.

It is now expanding into electrolyte additives for batteries, especially vinylene carbonate and fluoroethylene carbonate. These materials improve battery lifespan, safety, and performance. Notably, Acutaas is the first company outside China to develop electrolyte additives at a global scale.

Acutaas is establishing 2,000 MT of capacity each at its Jaghadia facility. Although commercial production has commenced, volumes are expected to scale meaningfully from Q4FY26. Export orders are already in hand, and management expects revenue contributions to begin in FY27. Acutaas is aiming for an asset turnover of around 2.5x and a payback period of 3 to 3.5 years.

Acutaas is also the only Indian manufacturer of semiconductor-grade photoresist chemicals. Photoresists are among the key materials in chip fabrication and require very high purity levels. The company entered the semiconductor industry by acquiring a 55% shareholding in Baba Fine Chemicals in FY23. Acutaas has also formed a JV (75:25) with J & Materials of South Korea.

The JV is expected to supply semiconductor chemicals for the Korean and global markets, with revenue contribution expected from H2 FY27.

A more capital-intensive, yet structurally significant, shift is underway at Archean Chemicals. Traditionally focused on bromine and industrial salt, the company is moving downstream into compound semiconductors through a silicon carbide fabrication facility. Silicon carbide devices are increasingly used in EVs, renewable energy systems, railways, and data centres due to their superior efficiency and thermal performance.

The project was formally launched in November 2025 and is expected to be completed over a 30-month timeline. Archean is undertaking this expansion through a strategic collaboration with UK-based Clas-SiC Wafer Fab. This collaboration provides access to silicon carbide process technology, including design kits and process modules.

The facility is being developed as an integrated fabrication and packaging unit, with a planned capacity of 60,000 wafers and 96 million packaged units annually.

Semiconductor manufacturing also depends heavily on ultra-high-purity gases, an area where Stallion India Fluorochemicals is positioning itself. The company is expanding its capabilities in helium processing and high-purity gas handling. It is targeting applications in semiconductors, solar cells, and fibre optics.

Semiconductor manufacturing requires 6N purity, creating high entry barriers. Stallion plans to address this with specialised infrastructure, testing, and cylinder conditioning. Its investments reflect an effort to shift from conventional industrial gases to mission-critical applications where reliability and purity are non-negotiable.

To conclude, a clear pattern is emerging. Indian chemical companies are embedding themselves deeper into supply chains to tap into high-growth verticals, such as battery chemicals and semiconductors. As capacities gradually come online, execution, customer qualification, and capital discipline will determine whether these diversification efforts translate into sustainable long-term relevance.