New Delhi, Feb 25,2023: The surprising discovery of 5.9 million tonnes of high-quality lithium reserves in Jammu and Kashmir has ignited the debate whether India can utlise this huge find sooner to challenge the dominance of countries like China in the world of EVs, smartphones, and other consumer electronics items.

To date, India has been heavily relying on imported lithium-ion batteries because of a lack of raw materials to make the battery cells. The country imports about 70 per cent of its battery-cell requirements from China and Hong Kong, according to the international management consulting firm Arthur D. Little.

“A virtuous cycle seems to have set off with the massive growth envisaged in electronics manufacturing, solar equipment, advanced chemistry cells (ACC), EVs etc,” said Pankaj Mohindroo, Chairman of The India Cellular and Electronics Association (ICEA).

“Lithium is a critical raw material and its vast discovery is very good news. We have about 1-2 years to put the discovery into commercial production. That is when our processing and ACC industry will mature and start using lithium directly,” Mohindroo told IANS.

ACC batteries are the new generation of advanced storage technologies which store electric energy as electrochemical and convert it back to electric energy as and when required.

The ACC covers major sectors, which are consumer electronics, mobiles, electric vehicles, advanced electricity grids, solar rooftop etc.

According to industry experts, now comes the hard part to convert this reserve into a commercially-viable resource after mining and refining it, which is a daunting task and the government will need to infuse a lot of money and expertise in achieving this.

“With the increased adoption of electric mobility in recent years, there is a huge demand for Li-ion batteries. The recent finding of 5.9 million tonnes of lithium in Jammu & Kashmir will significantly boost the sector,” said Pratik Kamdar, Co-Founder, Neuron Energy.

“Currently, India is also progressing into cell manufacturing of batteries and it will provide the much-needed impetus to the sector as it will reduce the dependence on imports while also solving the supply-chain challenges as the country will have its own reserves of lithium,” he said.

There will also be a cost impact as the cells, when manufactured indigenously, will become cheaper.

Coupled with a favourable announcement by the government during the Union Budget 2023 on the exemption of customs duty on imports of capital goods and machinery for manufacturing of li-ion cells for EV batteries, this indigenous supply of lithium reserves will help the EV eco-system reach the masses at reasonable and affordable costs.

“Additionally, this will also support the government’s vision of EV mass adoption by 2030,” said Kamdar.

The government intends to grow EV sales in India to capture the markets of 30 per cent of private cars, 70 per cent of commercial vehicles and 80 per cent of two and three-wheelers by 2030.

The find could enhance India’s aspirations of becoming a green industrial power and change the medium- and long-term outlook for lithium availability, helping avoid a lithium access race between the US and China, according to the Peterson Institute for International Economics.

“The discovery would place India sixth in terms of lithium resources, just behind leading producer Australia and ahead of China, the largest raw lithium importer and producer of lithium-ion batteries,” the institute added.

Lithium reserves have, thus far been limited to a few countries globally, and India is dependent on importing lithium from them.

“For India to realise its transition to green energy, it is imperative to attain self-reliance across the entire end-to-end EV supply chain ecosystem, including having access to lithium for battery manufacturing. This is why the discovery of lithium reserves in India is a major development,” Prabhu Ram, Head-Industry Intelligence Group, CMR,

According to industry experts, it may take some years for India to reap the benefits but the future looks promising for the country to cut its dependency on countries like China.