If you go by the relentless stream of headline events and claims, India under the Narendra Modi government seems all set to become self-sufficient in lithium-ion batteries, breaking free of China’s shackles and taking its rightful place in the battery-electric-vehicle revolution. But the reality is so underwhelming you’d be justified in reaching for a lithium pill to ward off depression.
The Productivity Linked Incentive (PLI) scheme, aimed at making India Atmanirbhar in advanced battery storage, has achieved less than 3 per cent of its target after five years, according to a study. In part, the gap exists because a chunk of the money was allotted to a gold exporter tainted by an alleged scam, rather than an actual battery maker. There have been zero bidders for the supposedly record-breaking lithium deposit found in Jammu and Kashmir, and no evident benefits from a slew of international agreements signed with fanfare by the Modi government.The result: India’s lithium-ion battery imports jumped 57 per cent to $4.7 billion in 2025-26, most of it from China. The dependency increased ninefold since 2018, and it is only going to grow.
Why are we here?
First, outright policy failure. One reason the battery PLI failed is that one of the winners was Rajesh Exports, which is allegedly linked to Gautam Adani and has failed to produce a single watt-hour in five years. The gold firm has since been accused of a Rs 15.5 lakh crore fraud. Meanwhile, experienced battery makers like Exide Industries and Amara Raja failed to win any government subsidies, although they are much further along in their lithium-ion battery plans – clear evidence of poor policy choices by the Modi government.Second, premature celebration. Recall how the Modi government tom-tommed the Reasi (J&K) lithium deposit as a discovery that would make India the world’s seventh largest lithium source. Yet it has failed to find a single bidder in two rounds of auctions. There are many reasons — the 5.9 million tonne deposit estimate is ‘inferred’ and hence preliminary, the mineral lies in difficult-to-mine clay, and persistent shortcomings in mining regulations. Moreover, there is only a single lithium refiner in India; exporting lithium ore mined in India to China for processing would hardly assure mineral independence for us.Third, photo ops over delivery. Despite the hullabaloo, India has yet to reap any serious benefit from initiatives like the US-led Minerals Security Partnership (aimed at financing critical mineral projects) and the Indo-Pacific Economic Framework – the exception being a bilateral agreement with Australia that appears to have some concrete deliverables. India’s public sector Khanij Bidesh India Ltd (KABIL) has also made progress and is currently exploring for lithium in Argentina, for example. However, the pipeline of domestic and overseas Indian projects remains thin.This is problematic because a secure lithium supply chain will matter more and more for India. India is aiming for battery electric vehicles to comprise at least 30 per cent of all new passenger vehicles sold by 2030, with even higher proportions of two and three-wheelers and commercial vehicles. The government has pledged to reach 500 GW of non-fossil fuel capacity by the next three and a half years. Add to this a growing market for battery storage of electricity linked to India’s renewable energy push, and you have a recipe for complete dependence on China if things don’t change.
