India’s Growing Dominance in the EV Sector: A Global Shift Towards an Alternative Supply Chain

As the EV industry undergoes a transformation, India’s ability to develop a reliable and sustainable alternative to China will shape the future of the sector. This shift is not just about India's growth—it represents a fundamental realignment of the global EV battery supply chain towards a more diversified and resilient future.

March 12, 2025. By News Bureau

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articles

Sumit Mehetre

Sudeep Advanced Materials

Electric Vehicle Industry

battery materials

Battery Manufacturing

EV supply chain

Battery components

Introduction
The global electric vehicle (EV) industry is at a critical juncture. With China's recent threats to ban the export of LFP (Lithium Iron Phosphate) battery technology and ongoing geopolitical tensions between China and the United States, the world is actively seeking alternative supply chains. India, with its rapid industrialization and government-backed initiatives, is emerging as a reliable player in the global battery materials market. The country's strategic push in battery manufacturing, localization, and policy-driven incentives positions it as a crucial alternative to China’s dominance.

The Need for a Diversified Global EV Supply Chain
For years, China has held a near-monopoly over lithium-ion battery supply chains, controlling not only raw material processing but also manufacturing of key battery components like cathodes, anodes, and electrolytes. However, recent global disruptions—including trade restrictions, supply chain bottlenecks, and national security concerns—have underscored the need for diversification.

China’s proposed LFP export ban exacerbates these concerns. LFP batteries, widely used in EVs and energy storage systems, have gained prominence due to their cost-effectiveness, safety, and longer lifespan. If China restricts its export, manufacturers worldwide will struggle to source key materials, creating a supply chain vacuum that India is uniquely positioned to fill.

India’s Role in the Global Battery Supply Chain
India is actively investing in gigafactories and localizing its battery material supply chain to become self-reliant and cater to global demand. According to MolSynth Analytics, India’s projected battery demand will reach 175+ GWh by 2030, a staggering increase from just 10 GWh in 2023.
To meet this demand, several companies have already set up or announced battery material plants, spanning key components:

Anode Materials: Companies like Epsilon and Himadri are leading the charge in synthetic graphite anode production, crucial for high-performance lithium-ion batteries. HEG and Tirupati Graphite are focusing on natural graphite solutions, strengthening India's raw material capabilities.
Cathode Materials: Altmin is leveraging in-house research to develop high-purity LFP, while GFCL-EV is integrating global best practices for large-scale production. IFFCO-ALEEES and Neogen-ALEEES, with their technological tie-ups, are focused on sustainable and scalable manufacturing for next-generation cathode materials.
Precursor Cathode Active Materials (P-CAM): Sudeep Advanced Materials, a subsidiary of Sudeep Pharma Limited, is emerging as a key supplier for iron phosphate-based PCAMs. Sudeep Pharma Limited is one of the largest producers of iron phosphate in Asia for food and infant-grade applications, leveraging its expertise to expand into battery materials and provide high-purity solutions tailored for EV applications.
Electrolyte and Solvents: Alkyl Amines, Balaji Amines, and Prasol are investing heavily in electrolyte production, ensuring localized supply chains for battery-grade solvents. These companies are also working on advanced formulations to enhance battery efficiency and longevity.
Separators and Binders: TCPL, Jindal, and SRF are expanding their footprint in separator film production, a crucial component in battery safety and performance. SRF is also pioneering high-performance binders tailored for lithium-ion batteries.
Mining and Raw Material Processing: NMDC and JSW are investing in mining operations for critical minerals such as lithium, iron, and aluminum, ensuring raw material security for India’s battery supply chain.

Government Policies Driving Localization
The Indian government has introduced several policy measures to accelerate domestic battery manufacturing and reduce dependency on Chinese imports:

Production Linked Incentive (PLI) Scheme for Advanced Chemistry Cell (ACC)
- $2.25 billion allocated to incentivize domestic battery cell manufacturing.
- Companies like Ola Electric, Reliance New Energy, and Rajesh Exports have already received subsidies for gigafactories.
Faster Adoption and Manufacturing of Electric Vehicles (FAME) Scheme
- Direct subsidies to EV manufacturers to encourage adoption.
Domestic Value Capture Targets
- India aims to localize 60% of its battery manufacturing supply chain by 2030.

These initiatives not only boost domestic production but also position India as a viable alternative to China in the global supply chain.

Geopolitical Considerations and Market Dynamics
Beyond trade restrictions, China’s overcapacity in battery production is leading to financial instability among its manufacturers. According to industry reports, plant utilization rates in China are only at 60%, with many facilities operating at a loss. Meanwhile, India’s planned gigafactories align well with growing domestic and global EV demand, ensuring sustainable growth.

Furthermore, the US and Europe are actively diversifying their supply chains by seeking partnerships in India. With major automakers and battery manufacturers looking to de-risk their operations, India’s emergence as a trusted manufacturing hub is gaining traction. The shift in supply chain preferences towards India is part of a larger global effort to ensure stability, reduce geopolitical risks, and increase resilience in battery manufacturing.

Challenges and Future Outlook
While India is making significant strides, challenges remain:

Raw Material Availability: India still relies on imports for lithium and cobalt. Developing a robust recycling ecosystem and securing mining rights overseas will be crucial.
Technological Expertise: Despite rapid advancements, Indian manufacturers must continue investing in R&D to match global technological standards.
Supply Chain Bottlenecks: Expanding infrastructure for logistics, refining, and component manufacturing is essential for seamless production.

Despite these hurdles, India’s potential in the global EV supply chain is undeniable. By strategically capitalizing on geopolitical shifts, investing in local manufacturing, and fostering international collaborations, India can position itself as a leader in battery materials production.

Conclusion
China’s dominance in the EV battery market is being challenged due to geopolitical risks and market overcapacity. India, with its strong government backing, emerging gigafactories, and growing expertise in battery materials, is well-positioned to become a major player in the global supply chain. As the EV industry undergoes a transformation, India’s ability to develop a reliable and sustainable alternative to China will shape the future of the sector. This shift is not just about India's growth—it represents a fundamental realignment of the global EV battery supply chain towards a more diversified and resilient future.