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A recent flagship report by Global Trade Research Initiative (GTRI) titled “India’s Strategy to Avoid Harm in the Global EV Market Shake-Up” called for allowing market forces to steer India’s Electric Vehicle (EV) sector's growth and carve out its own path in global EV landscape.
Brief Background
- In 2023, China was a dominant force in global EV market, exporting 1.6 million EVs valued at USD 36.7 billion.
- USA, EU, Canada, and some other western countries, however, have started imposing tariff and other restrictions on imports of EVs and parts from China.
- In response, China is shifting its production and assembly units to other countries, starting with ASEAN nations and India.
- These units would still depend heavily on imports (70-80% of parts) from China, including batteries.
India’s unique EV Challenges
- Environmental Concerns: Over-reliance of India's electricity generation on fossil fuels like coal diminishes the environmental benefits of EVs.
- EV production, particularly battery manufacturing, has a high carbon footprint, starting from the mining stages.
- Dependence on China: >80% of an EV's cost comes from batteries and components produced in China.
- Risk of China dumping excess EVs in India as access to developed markets tightens.
Key Recommendations
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