Supply Chain Blocks in India's Electric Vehicle Sector: Challenges and Opportunities Published By Anupam Nath India's electric vehicle (EV) sector is poised for significant growth, driven by favorable government policies and increasing consumer interest. However, the supply chain for EV manufacturing in India faces several critical challenges that can slow down this momentum. Understanding these supply chain blocks is essential for stakeholders aiming to strengthen the EV ecosystem in the country.One major hurdle in the supply chain is the high import dependence for key raw materials and components, especially lithium, which is crucial for EV battery production. India currently lacks sufficient domestic lithium reserves, making it reliant on imports, primarily from countries like Australia and China. This dependency not only raises costs but also exposes manufacturers to geopolitical risks and supply disruptions. Efforts to establish raw material sourcing overseas and foster local mining are ongoing, but a fully integrated supply chain is still a work in progress.Localization of components remains low in India’s EV manufacturing industry. Critical parts such as electric motors, controllers, and battery cells have localization rates around 30-40%. This is partly because of the complex technology involved and the need for rare earth materials, which are mostly imported. The government’s incentive schemes like FAME, PLI, and customs duty adjustments aim to boost domestic manufacturing and attract investments into local production facilities. However, achieving scale and advanced manufacturing capabilities poses a formidable challenge.Additionally, the lack of robust charging infrastructure and logistics creates bottlenecks in EV adoption and distribution. While India has rapidly expanded its public charging network, more infrastructure is needed to support widespread EV usage, especially in rural and semi-urban areas. Furthermore, supply chain logistics dealing with the shipping and handling of specialized EV components require enhancement to ensure timely delivery and cost efficiency.Addressing these blocks requires coordinated efforts from government, industry, and research institutions. Policies encouraging backward integration in battery and component manufacturing, development of raw material supply chains, investments in technology and skills, and improvements in logistics and infrastructure are key focus areas. Strengthening these aspects will help India build a resilient and competitive EV supply chain to meet growing demand and transition towards sustainable mobility.
