The survey pushes for increased research and development in advanced battery technologies, such as sodium-ion and lithium-ion batteries, for a more self-reliant ecosystem.
31 Jan 2025 | 5991 Views | By Kiran Murali
With a view to reducing dependence of foreign countries such as China, the Economic Survey for 2024-24 has called for government policies aimed at de-risking EV supply chains by promoting a more self-reliant ecosystem.
China plays a central role in the global supply chain for EV components, such as ...
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With a view to reducing dependence of foreign countries such as China, the Economic Survey for 2024-24 has called for government policies aimed at de-risking EV supply chains by promoting a more self-reliant ecosystem.
China plays a central role in the global supply chain for EV components, such as batteries and rare-earth minerals, and any disruption due to geopolitical tensions or trade issues can pose risks to the production and availability of electric vehicles.
The survey pushes for increased research and development in advanced battery technologies, such as sodium-ion and lithium-ion batteries, for a more self-reliant ecosystem.
The Economic Survey is an annual report published by the Indian government that provides a comprehensive overview of the country's economic performance over the past year. It highlights key trends, challenges, and opportunities, and offers insights into the government's economic policies and priorities.
"Securing the intellectual property in this domain can prove invaluable. Additionally, facilitating investment in battery recycling infrastructure can yield greater long-term gains for the Indian automotive sector," the survey said.
EVs have been identified as a key enabler for India's low-carbon future. Currently, India's EV dreams are powered largely by imported batteries from China, Japan, and South Korea.
Localization of cell manufacturing is something that is being looked at keenly as made-in-India lithium-ion batteries hold immense potential to drive the adoption of electric vehicles in the country, besides making the country less import-dependent.
However, the biggest challenge for lithium-ion battery manufacturing in India is the availability of raw materials. India lacks significant reserves of minerals such as lithium, cobalt, nickel, and graphite, although some discoveries have been made in recent years.
This forces battery makers to depend on imported raw materials. India's lithium-ion battery industry heavily depends on imports, with China and Hong Kong being the primary suppliers.
China commands a significant share of critical mineral processing and production globally. Across key commodities such as nickel, cobalt, and lithium, China alone is responsible for processing 65%, 68%, and 60% of the global output, respectively.
"China's vertical integration across the entire electric vehicle (EV) supply chain, from mining to EV manufacturing, has enabled it to retain its global dominance in this sector," the survey noted.
"It is also pertinent to note that about 70 percent of the world's rare earth minerals, which are critical resources for high-storage batteries, are processed by Chinese companies."
In a bid to boost domestic manufacturing, the government has rolled out production-linked incentives schemes for automobile and auto components, as well as for advanced chemistry cell manufacturing.
Traditional lead acid battery manufacturers Exide Energy and Amara Raja are setting up gigafactories here for lithium-ion battery manufacturing.
Several new entrants such as Ola Electric, Reliance Industries, Tata Group, JSW Group, and GODI India, are also establishing their facilities for large-scale lithium-ion battery manufacturing.
Companies like Ola Electric and Reliance Industries were approved under the Rs 18,100-crore PLI scheme. However, none of the gigafactories planned under the PLI scheme has started commercial operations.
Automakers have also been saying that localization of cell manufacturing is crucial for making EVs affordable and addressing supply chain risks.
"As a nation, you will always take counter actions to ensure that value addition happens domestically. The government may impose duties at some stage, so it would be short-sighted not to localize," Tata Passenger Electric Mobility MD Shailesh Chandra said recently.
The Economic Survey emphasized the importance of international technology transfer agreements for nations diversifying their supply chains, noting that such partnerships can distribute the high costs of achieving global competitiveness.
Most of the battery makers in India lack expertise in the technology for manufacturing lithium-ion batteries. Hence, many have roped in foreign technology partners, or are in the process, to help them manufacture the batteries here.
These partnerships also help bring in a global supply chain for critical battery materials, as well as customer support for deploying these solutions.
Amara Raja has partnered with Gotion-InoBat-Batteries to license Gotion's LFP technology for manufacturing lithium-ion cells, while Exide has tied up with China-based SVOLT Energy Technology.
Reliance Industries is leveraging electrochemical and product innovation expertise from its subsidiaries Lithium Werks and Faradion to drive the fully integrated battery Gigafactory, while JSW Group is scouting for technology partners.