Cosmx Partners with India's Munoth for Lithium Cells
Cosmx, the battery pack unit of China's Desay Battery Technology, is making a strategic move in India. Instead of building its own plant due to regulatory challenges, the company has agreed to a joint venture with Chennai-based Munoth Industries. This deal aims to secure a supply of lithium-ion cells, boost Cosmx's presence in India's growing market, and navigate China's new export controls on key battery tech. The partnership will help Cosmx supply Chinese smartphone makers in India and uses Munoth's cell manufacturing ability, which is approved under India's Electronics Components Manufacturing Scheme (ECMS).
Regulatory Hurdles and Approval Timeline
Getting approval for the joint venture depends on India's Foreign Direct Investment (FDI) rules, particularly Press Note 3. This note requires government clearance for investments from countries bordering India, like China. The approval application is planned for early April 2026, with a decision expected within two months. While recent changes in March 2026 have slightly eased rules for smaller stakes, this JV will likely face close government review. Munoth Industries already has ECMS approval for its lithium-ion cell plans. Cosmx plans to hold a 26% stake in the cell manufacturing facility. Production is expected to begin by the September quarter of 2026, including technology transfer from Cosmx. On March 24, 2026, Cosmx's parent company, Desay Battery Technology, saw its stock price climb 6.88%, performing better than the wider China Shanghai Composite index.
Market Context and Competition
The deal comes as the global supply chain tightens, especially with China's export controls on advanced lithium battery tech and materials, which took effect November 8, 2025. These rules aim to protect China's tech lead and may push battery makers to set up production abroad. India relies heavily on imported lithium-ion cells, so this JV supports its goal of building local manufacturing through programs like PLI and ECMS, despite reported difficulties. Cosmx's plan to source cells locally in India contrasts with competitors: Amperex Technology Limited (ATL) is building a plant in Haryana, and Sunwoda Electronic has a subsidiary in Noida. Analysts note that while ATL leads in cell production and Sunwoda in pack assembly revenue, Cosmx is trying to establish itself via local sourcing. Desay Battery Technology (SZSE:000049) had a market cap of about $10.55 billion on March 27, 2026, with a P/E ratio near 25.82.
Risks and Challenges Ahead
However, the JV faces several risks. The biggest is the lengthy regulatory approval under India's Press Note 3, which could cause delays or strict conditions, especially for technology transfer due to China's export controls. Cosmx's approach may be an attempt to overcome previous denials for its own plant, suggesting possible issues with setting up fully owned operations. Desay Battery also faces scrutiny over its finances. Analysts point to a low P/E ratio indicating weak growth forecasts, modest net sales growth, and a five-year decline in operating profit. Strong competition from ATL and Sunwoda, who are also growing in India, adds another challenge. The JV's success will depend on combining Cosmx's pack assembly skills with Munoth's cell manufacturing, while managing India's changing rules and China's export policies.
Production Target and Strategy
Production is planned to start by the September quarter of 2026. This move aims to localize critical battery component manufacturing in India. The partnership seeks to serve India's growing market and strengthen Cosmx's supply chain against global geopolitical changes and export limits. Cosmx has already invested over 100 million RMB (about Rs 110 crore) in India since 2016, showing a long-term commitment to the region.