India's Long Road to Lithium

Amid the global rush for the critical mineral, India is looking to improve its lithium supply chain in a number of ways, including leveraging private and public industries to sustain its future sector growth and address strategic vulnerabilities. Much of this will be driven by technology and the transition to green energy, with lithium making a major contribution to India's economic growth and national security.

In 2023 the Ministry of Mines issued a 'Important minerals for India' list. The document defines Important minerals 'Indispensable to economic development and national security' and 'non-availability' or 'concentration of extraction or processing in certain geographical locations' lead to disruption of supply chains.

Lithium is classified as a 'Strategic' mineral Being 100 percent import dependent is at the top of the priority list. Rising imports indicate that the challenge has become tougher – Li-ion battery imports have increased from US$384.6 million in 2018-19 to US$2.8 billion in 2022-23. With China accounting for 60-70 percent of lithium refining capacity and a significant portion of lithium reserves, this increase helps explain the emerging China factor in Indian policymaking and is reflected in the pace of new critical minerals policies.

Recent discoveries of new lithium reserves Jharkhand, Rajasthan And Jammu and Kashmir 2023 attracted the attention of government and private companies. To exploit the deposits, the government simplified the mining process, allowing auctions. Lithium mines. The decision opened the gates for private companies to mine lithium, moving away from most state-owned companies that had previously been involved in the process. By 2023, there were 20 blocks of critical and strategic minerals A bid was made to increase the mining process, including two lithium blocks in Jammu and Kashmir and Chhattisgarh. India also expects Fifteen coastal blocks auctioned March 2024 for mineral mining.

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The government has started liberalizing policies and regulations in the mining sector to encourage manufacturing industries in India. These steps, aimed at easing bureaucratic hurdles in those areas, indicate that India is serious about establishing a secure supply chain. This change in policy environment aims to address supply chain vulnerabilities and dependence on competitors for strategic mineral supply.

In addition to enacting laws and policies, the government is also focused on expanding incentives, simplifying regulations, pushing reforms and fixing loopholes to build the lithium critical mineral supply chain. Government recently declared Incentive of 25 per cent on sanctioned project cost to public and private companies for exploration of minerals, and A ban is being considered Exports of four important minerals including lithium.

New Delhi aims to build an electric vehicle industry ecosystem, and lithium is an essential component of this. In industry, battery technology is seen as vital to India's economic growth, green energy transition and its goal of net zero emissions by 2070. Demand for batteries It is expected to increase to 260 GWh by 2030. To address this, India exists 18,000 crore extended (US$2.16 billion) Production Linked Incentive (PLI) program to develop advanced chemical cells. This is the result Attracted many Domestic private companies like Ola Electric and Reliance New Energy. The second PLI tranche is expected to attract global heavyweights such as Panasonic, LG Chem and Samsung.

To promote research and innovation, India has extended assistance through financial and technology transfers to develop domestic lithium battery capabilities. Govt has Made cost effective Li-ion battery recycling technology under 'Mission Life' and recycling industries. Focusing on research and innovation, the Department of Science and Technology also supports 32 projects for battery storage.

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But India still faces several hurdles, including the lack of a reliable supply chain network, both upstream and downstream. New Delhi's dependence on China for raw materials and sector-specific end products in the form of lithium and lithium-ion batteries remains a challenge. India imports About 70-80 percent of lithium and 70 percent of lithium-ion come from China. Reliance on China could jeopardize India's growth and domestic industries if tensions between the countries persist.

The government is building new international partnerships to improve lithium ore security and de-risk the lithium supply chain. is in India Finalized Lithium contracts with Argentina should be secured Five modules Mineral and has already signed two With Australia. There is also India discusses Developing processing technology with the US on critical minerals. Domestically, progress in mineral protection is positive, but further efforts are needed to remove bureaucratic red tape and domestic innovation restrictions.

Going forward, the government should encourage startups interested in the private mining sector and lithium exploration and build a supply chain in the upstream, midstream and downstream arenas. India should also partner with like-minded countries such as the US, Japan, Australia, Indonesia and South Korea to strengthen global lithium supply chain governance and reduce strategic vulnerabilities. Leading forums such as the Indo-Pacific Economic Framework, the Minerals Security Partnership and the QUAD should be prioritized to consolidate initiatives in the Indo-Pacific region and then expand them globally.

Abhishek Sharma is a Research Associate at the Center for Air Power Studies and a PhD candidate in the Department of East Asian Studies at the University of Delhi.

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