The missing pieces in India’s EV push

Financial Express  |  Saurav Anand

India assembled a record 2.27 million electric vehicles in 2025, yet Chinese imports still account for 66% of component value, exposing severe strategic vulnerabilities in the supply chain. Critical high-value components including lithium-ion advanced chemistry cells, automotive-grade semiconductors, and permanent magnets remain heavily dependent on Beijing's upstream refining monopolies.

While domestic manufacturers have localized basic structural chassis assembly and battery packing, upstream cell manufacturing reached only 1.4 GWh out of 28 GWh in annual demand under the government's ₹18,100-crore Production-Linked Incentive scheme. Imports of rare-earth permanent magnets reached 53,700 tonnes in FY25, with 93% coming from China, leaving motor production highly susceptible to export restrictions. To counter this, New Delhi launched the ₹34,300-crore National Critical Mineral Mission and dedicated ₹7,280 crore for domestic magnet production. However, with demand projected to hit 272 GWh by FY30, analysts estimate that reducing Chinese reliance below 50% across key inputs remains unachievable before 2030–2035.

Comment

Upstream refining bottlenecks in critical battery chemistries create systemic operational exposure that assembly-level subsidisation cannot offset. The National Critical Mineral Mission demonstrates that financial incentives alone fail to bypass the decade-long gestation periods required for commercial-scale rare-earth processing. China's dominant position across cathode active material production leaves downstream vehicle integration vulnerable to targeted export quotas. This structural asymmetry exposes how late-stage manufacturing capacity remains constrained by early-stage material dependencies.

Strategic Question for Discussion

Which factor will determine the failure or success of the National Critical Mineral Mission — state-led capital allocation for domestic processing infrastructure or securing long-term overseas mineral concessions through bilateral partnerships?

Share your assessment in the comments below.

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