India’s EV Ambition: Walking a Strategic Tightrope Between Self-Reliance and Dependence on China
India is accelerating its push towards building a robust electric vehicle (EV) ecosystem, but the road to self-sufficiency remains complex. Despite ongoing geopolitical tensions with China, India has not followed the U.S. path of imposing sweeping restrictions on Chinese companies. Instead, New Delhi is treading a strategic middle ground — leveraging Chinese expertise and materials in the short term while fostering long-term domestic innovation and self-reliance.
The Rise of EV Ambitions in India
The Indian government has laid out an aggressive vision for e-mobility through initiatives such as the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, Production-Linked Incentive (PLI) programs, and the promotion of battery swapping and charging infrastructure. The goal is clear: make India a global EV manufacturing hub and reduce reliance on fossil fuels.
However, the critical barrier remains the supply chain, particularly for batteries, semiconductors, and rare earth elements — sectors where China dominates globally. From lithium processing to the manufacturing of anode/cathode materials and battery packs, Chinese firms control over 70% of the world’s EV battery supply chain.
Strategic Dependency: A Necessary Compromise
India is well aware of its vulnerabilities. Its domestic reserves of lithium and cobalt are limited, and mining or refining capacity is still in its infancy. The recent discoveries of lithium in Jammu & Kashmir and Rajasthan offer long-term hope, but commercial extraction is still years away.
To bridge this gap, Indian automakers and startups are sourcing Chinese components, often indirectly via Southeast Asian or European intermediaries. Inverters, battery management systems (BMS), and even entire battery modules are being imported from China. EV two-wheeler brands like Ola Electric, Ather, and others rely on China-origin cells or key components.
Yet, unlike the United States, India is not blacklisting Chinese firms across the board. Instead, it’s seeking technological partnerships, investments in local assembly, and even joint ventures — a pragmatic approach to avoid supply disruptions while building domestic capacity.
The Push for Indigenous Innovation
India’s long-term strategy rests on nurturing local manufacturing and R&D. Government-backed institutions and private players are working to develop sodium-ion batteries, solid-state batteries, and alternative chemistries to reduce reliance on lithium and cobalt.
The PLI scheme for Advanced Chemistry Cell (ACC) battery storage aims to incentivize domestic production of battery cells with significant capacity already awarded to firms like Reliance New Energy, Ola Electric, and Rajesh Exports. The goal is to localize the entire EV ecosystem — from raw materials to final assembly.
Moreover, partnerships with resource-rich countries like Australia, Argentina, and Chile are being explored for securing critical minerals. Indian companies are also investing in overseas mines and refining units to diversify beyond China.
Balancing Geopolitics with Green Goals
India’s balancing act is not just economic — it is deeply strategic. By not closing the door on Chinese technology, India is avoiding a sudden spike in costs or supply chain shocks that could derail its green transition. At the same time, it is steadily building internal capabilities, ensuring that over-dependence doesn’t translate into long-term vulnerability.
This dual-track approach — cooperation for now, competition for later — is in stark contrast to the decoupling strategy seen in Washington. It reflects New Delhi’s desire to lead the EV transition on its own terms, without getting caught in the crossfires of global power rivalries.
India’s journey toward EV leadership is both ambitious and realistic. While the goal is strategic autonomy, the path involves collaboration — even with geopolitical rivals like China. By focusing on innovation, incentivizing domestic production, and pragmatically managing dependencies, India aims to become not just a consumer but a global supplier of EV technology.