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.