Amid a worldwide rush for important minerals, India is seeking to develop its lithium provide chain via numerous means, together with leveraging non-public and public industries to maintain its future sectoral development and to repair strategic vulnerabilities. Much of this might be pushed by know-how adoption and the transition to inexperienced power, with lithium probably making a important contribution to India’s financial development and nationwide safety.

In 2023 the Ministry of Mines launched a ‘Critical Minerals for India’ listing. The doc defines critical minerals as these which ‘are essential for economic development and national security’ and whose ‘lack of availability’ or ‘concentration of extraction or processing in a few geographical locations’ might result in the disruption of provide chains. 

Lithium is categorised as a ‘strategic’ mineral with 100 per cent import dependence, inserting it on the high of the precedence listing. Rising imports point out that the problem has turn into acute — Li-ion battery imports elevated from US$384.6 million in 2018–19 to US$2.8 billion in 2022–23. With China making up 60–70 per cent of lithium refining capability and a good portion of lithium reserves, this enhance helps clarify the China factor rising in Indian policymaking and is mirrored within the tempo of latest important minerals insurance policies. 

Recent discoveries of latest lithium reserves in Jharkhand, Rajasthan and Jammu and Kashmir in 2023 have attracted consideration from authorities and personal gamers. To leverage the deposits, the federal government has eased the mining course of by permitting the public sale of lithium mines. The determination opened the gates for personal gamers to mine lithium, a shift from the largely state-run firms beforehand engaged within the course of. In 2023, 20 blocks of important and strategic minerals have been auctioned to boost the mining process, together with two lithium blocks in Jammu and Kashmir and Chhattisgarh. India can also be seeking to auction fifteen off-shore blocks for mineral mining in March 2024.

The authorities has additionally begun liberalising insurance policies and rules within the mining sector to encourage industries to fabricate in India. These steps, which purpose to mitigate bureaucratic obstructions in these areas, sign that India is severe about establishing a safe provide chain. This change in coverage setting goals to addresses provide chain vulnerabilities and dependence on opponents for strategic minerals provide.

In addition to enacting legal guidelines and insurance policies, the federal government has additionally centered on extending incentives, simplifying rules, pushing reforms and fixing loopholes as a way to construct a lithium important mineral provide chain. The authorities not too long ago announced an incentive of 25 per cent of authorised challenge prices for private and non-private firms to assist the exploration of minerals, and can also be considering banning the export of 4 important minerals, together with lithium.

New Delhi is aiming to construct an electrical car sector ecosystem, and lithium is a vital part for this. Within the trade, battery know-how is taken into account important for India’s financial development, inexperienced power transition and the accomplishment of its aim of web zero emissions by 2070. Demand for batteries is anticipated to rise to 260 GWh by 2030. To deal with this, India has extended a Rs 18,000 crore (US$2.16 billion) Production Linked Incentive (PLI) scheme to develop Advanced Chemistry Cells. This determination has attracted many home non-public gamers like Ola Electric and Reliance New Energy. The second PLI tranche is anticipated to entice international heavyweights equivalent to Panasonic, LG Chem and Samsung. 

To encourage analysis and innovation, India has additionally prolonged help via funds and know-how transfers to develop indigenous lithium battery capabilities. The authorities has transferred cost-effective Li-ion battery recycling know-how to startups and recycling industries underneath ‘Mission LiFE’. Focusing on analysis and innovation, the Department of Science and Technology can also be supporting 32 initiatives for battery storage. 

But India nonetheless faces many obstacles, together with the absence of a trusted supply chain community each upstream and downstream. New Delhi’s dependency on China for uncooked supplies and sectoral finish merchandise within the type of lithium and lithium-ion batteries, stays difficult. India imports virtually 70–80 per cent of its lithium and 70 per cent of its lithium-ion from China. This reliance on China may put India’s development and home industries in danger if tensions between the international locations proceed. 

The authorities can also be creating new worldwide partnerships to boost its lithium mineral safety and de-risk the lithium provide chain. India has finalised lithium agreements with Argentina to safe five blocks of the mineral and has already signed two with Australia. India can also be discussing creating processing know-how with United States on important minerals. Domestically, progress in mineral safety has been optimistic however additional efforts are required to take away bureaucratic pink tape and home innovation restraints. 

Going ahead, the federal government ought to incentivise the non-public mining sector and startups serious about lithium exploration and construct the availability chain throughout the upstream, midstream and downstream arenas. India should additionally companion with like-minded international locations such because the United States, Japan, Australia, Indonesia and South Korea to strengthen international lithium provide chain administration and scale back strategic vulnerabilities. Leveraging boards such because the Indo-Pacific Economic Framework, Mineral Security Partnership and the Quad have to be prioritised to attach initiatives within the Indo-Pacific area and later lengthen them globally.

Abhishek Sharma is Research Associate on the Centre for Air Power Studies and a PhD Candidate on the Department of East Asian Studies within the Delhi University.