India’s dream of becoming a global hub for electric vehicles is accelerating, but a hidden challenge could slow down this journey—Lithium Import Dependence. While EV adoption is rising and government policies are paving the way for greener mobility, the reality is that India relies heavily on imported lithium and rare earth minerals, particularly from China. This dependence raises serious concerns about supply chain stability, rising costs, and long-term sustainability. Could this single bottleneck derail India’s clean mobility mission? Let’s uncover why lithium is both the backbone and the biggest threat to India’s EV manufacturing ambitions.
Lithium Import Dependency
Maruti Suzuki Chairman R.C. Bhargava has voiced concerns about India’s dependence on imported lithium and rare earths—especially from China. He highlighted that China’s recent curbs on rare earth magnet exports expose the risks of supply disruptions, which discourage investors from backing capital-intensive battery cell manufacturing projects in India.
Bhargava also pointed out that setting up a battery-cell plant can require investments as high as ₹20,000 crore. Without reliable raw material access, such massive investments carry significant risks, keeping potential investors cautious and slowing down India’s EV progress.
Progress via Localization
Despite the challenges, Maruti Suzuki’s subsidiary, TDS Lithium-Ion Battery Gujarat (TDSG), has achieved localized production of lithium-ion battery cells at the electrode level. These batteries are currently used in the hybrid systems of the Grand Vitara SUV. While this milestone is encouraging, Bhargava stressed that scaling up localization requires broader strategic actions, including diversifying raw material sources and building resilient supply chains.
Scaling Demand, Limited Supply
India’s demand for lithium-ion batteries is projected to grow rapidly—from about 3 GWh today to nearly 115 GWh by 2030. EV-linked demand alone is expected to rise at a CAGR of 48%, creating the need for more than 250 kilotonnes of critical minerals worth over $5 billion. However, India currently lacks sufficient production infrastructure and depends heavily on imports for battery cells and critical raw materials.
Strengthening the Foundations: Domestic Reserves & Government Initiatives
India has begun taking steps to secure its EV future through multiple initiatives:
- Lithium Reserves in J&K: Around 5.9 million tonnes of lithium have been discovered in the Reasi district of Jammu & Kashmir, placing India among the top holders of lithium resources globally. However, challenges such as environmental sensitivities, technical refining hurdles, and early-stage exploration remain.
- National Critical Mineral Mission: Recently launched, this mission aims to ramp up exploration and domestic production of critical minerals essential for EVs.
- Government Battery Incentives: Through the Production Linked Incentive (PLI) scheme for Advanced Chemistry Cells (ACC), several companies, including Ola Electric, Reliance New Energy, Rajesh Exports, Panasonic, LG Energy Solution, JSW, and Tata’s Agrata, have committed to building large-scale gigafactories.
- Allocation of Lithium Blocks: The government is planning to allocate lithium blocks in Jharkhand to strengthen raw material sourcing.
- Recycling Initiatives: Startups are innovating with recycling by turning e-waste into battery-grade materials, helping reduce dependence on imports, and supporting a circular economy.
The Road Ahead
India’s EV ambitions require more than rising consumer demand—they demand a secure and self-reliant supply chain. Ensuring stable access to raw materials, encouraging investments in domestic refining and processing, forming global partnerships, and developing recycling capabilities will be key to success. As companies like Maruti Suzuki push forward with hybrid and electric vehicles, and as government initiatives unfold, the path to sustainable EV manufacturing in India becomes clearer. Still, overcoming lithium import dependence remains the most critical challenge to realizing the nation’s clean mobility future.
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