India's Lithium dependency

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Lithium has been among the most sought-after mineral during the past few years, largely on the back of its usage in battery manufacturing.
India is at odds with a major import source for the mineral, China.

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India has been scouting for lithium reserves as the mineral is a key component of lithium-ion batteries, the demand for which has surged amid the Centre’s push to boost the adoption of electric vehicles (EVs) in the country.

The production-linked incentive scheme for advanced chemistry cell (ACC) battery storage, a flagship incentive scheme for the industry has kicked off and the supply of lithium, which is largely an imported product, has declined.

With India being in a diplomatic tussle with China, the supplies from the neighbouring country have declined and India too is looking for other import avenues.

The supply of lithium has not been in line with the surge in demand from electric vehicle makers across the world.

China also is witnessing a mismatch between demand and supply, which has led to a rise in prices.

India is dependent on imports for lithium as production in the country is minimal.
India was importing the by-product, lithium-ion batteries.
The first traces of lithium have been found in Karnataka’s Mandya district.
The preliminary find is relatively small, with just about 1,600 tonnes of lithium deposits.

Australia was the largest lithium producer in 2021, according to US Geological Survey.
Chile and China have been ranked second.

India is searching for domestic reserves and looking for newer countries to source the mineral.
Recently, India committed to jointly invest $6 million with the Australian government to explore lithium and cobalt mines there over the next six months.
Khanij Bidesh India Ltd (KABIL) has signed a preliminary agreement with Australia’s Critical Minerals Facilitation Office.
In 2020, KABIL also signed a pact with an Argentine firm to jointly explore lithium in the South American country.

A NITI Aayog report in 2017 estimated that India’s EV battery market alone could be worth $300 billion from 2017 to 2030 if India could rapidly transition to EVs.
According to the report, the growth in EV adoption would bring social and economic benefits as dependence on imports reduces, public health improves, and renewables are integrated into the grid.
The report highlights India’s lack of lithium reserves but offers a solution to the issue.

According to the report, India will have the opportunity to produce both battery cells and packs, while importing only the cathode or its raw materials from mineral-rich regions. In this scenario, India stands to capture nearly 80 per cent of the total economic opportunity.
Hence, a focus on battery manufacturing could allow India to capitalise on the EV boom.

The report also believes that the imports of some of the battery components would be more than offset by the lower imports of oils, allowing the country to reduce imports.
According to the report, India could also scale its operations and become an exporter of batteries as well.