NITI to review the EV policy of India to reduce the China dependence
The NITI Aayog intends to assess India’s aggressive drive towards EV policy of India, as China accounts for almost 75% of lithium-ion imports.
According to a senior official, a portion of the administration believes that India should not rely largely on China for lithium-ion and should instead seek other green sources to power its future vehicles.
“Internal deliberations are underway, and the plan is to assess India’s reliance on China for this critical component of EVs, as well as the long-term implications for the economy,” added the unnamed official.
The negotiations are important because China is considering restricting exports of certain rare-earth materials and high-performance magnets used in EV motors. The plan could result in China having a monopoly on EV motor manufacture. The volume and value of lithium-ion imports into India have increased significantly, owing to increased demand for EVs.
India’s total lithium-ion imports increased from $1.83 billion in 2021-22 to $2.31 billion in April 2022-January 2023. In the first ten months of 2022-23, over 75% or $1.75 billion of these imports came from China, followed by 10% or $248 million from Hong Kong, 9.3% or $216 million from South Korea, and negligible amounts from Vietnam and Singapore.
Most likely, the imports from Vietnam and Singapore are being redirected from China. Despite the fact that we now have theoretical lithium deposits, the industry’s reliance on China puts it at risk.
According to a recent report by the Global Trade Research Initiative, EV manufacturing in India will increase the country’s reliance on China for raw materials, mineral processing, and battery production, implying that the EV sector’s life cycle impact on jobs, pollution levels, imports, and economic growth should be assessed.
According to the report, China has purchased the largest lithium mines in Australia and South America, and it processes more than 60% of the lithium produced globally, in addition to 65% of cobalt and 93% of manganese.
While the Atomic Minerals Directorate for Exploration and Research is conducting lithium exploration in Karnataka and the Geological Survey of India is conducting mineral exploration, including lithium exploration, experts say these are long-term projects that will take several years before India becomes self-sufficient in lithium-ion production to power its batteries.
India has also implemented a Rs 18,100 crore production-linked incentive scheme to manufacture advanced chemical cells in the nation over the next five years in order to become self-sufficient and avoid future supply disruptions.
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