NEW DELHI: India’s lithium imports have surged more than ten-fold in eight years, reflecting the rapid expansion of the electric vehicle (EV) market and rising demand for battery storage, even as domestic manufacturing capacity continues to lag behind consumption growth.
According to data from the ministry of commerce and industry, lithium imports rose from Rs 3,532 crore in FY18 to Rs 37,624.6 crore during April-February FY26. Imports stood at Rs 25,458.6 crore in FY25, and have already climbed nearly 48% in the first 11 months of FY26, underscoring the sharp acceleration in demand for lithium-ion batteries.
The surge is being driven primarily by the growing adoption of EVs in India, where penetration has risen to an estimated 8.5%, alongside expanding deployment of energy storage systems and consumer electronics manufacturing.
Industry executives say the import trajectory is likely to remain on an upward curve as India continues to push for accelerated electrification of transport and mobility. However, analysts caution that without a matching expansion in domestic battery manufacturing and critical mineral processing capacity, rising demand from the EV transition could deepen import dependence and keep the import bill elevated over the medium term.
Despite multiple government initiatives aimed at building a local battery ecosystem — including the Rs 18,100-crore advanced chemistry cell (ACC) production-linked incentive (PLI) scheme, the Rs 34,300-crore National Critical Mineral Mission, and the Rs 1,500-crore Critical Mineral Recycling Incentive Scheme — progress on large-scale domestic cell manufacturing has been slow.
The ACC PLI scheme, launched in 2021 with a target of 50 GWh of domestic cell capacity, has seen limited operational progress. Among selected beneficiaries, only Ola Electric has commissioned a small portion of its allocated capacity, about 1.5 GWh against a 20 GWh target. Other major awardees, including Reliance New Energy and Rajesh Exports, are yet to significantly operationalise their committed capacities.
The delay in scaling up domestic production has kept India heavily dependent on imported lithium and battery materials, much of which flows through China-linked global supply chains. Industry players say demand creation has significantly outpaced supply-side readiness.
“EV adoption has accelerated rapidly, but localisation of battery manufacturing has not kept pace,” said an industry executive at an automobile original equipment manufacturer. Policy initiatives aimed at critical mineral development and recycling have also seen slow execution, further delaying efforts to reduce import dependence.
At present, there is no meaningful domestic lithium extraction at scale, while recycling capacity remains limited, making imports the primary source of battery-grade materials. Analysts warn that unless domestic refining, mining, and recycling ecosystems scale up quickly, India risks replacing dependence on crude oil with a new reliance on imported critical minerals.
Industry experts argue that stronger enforcement of production-linked incentives, combined with faster coordination between government and industry, will be essential to accelerate domestic manufacturing and reduce exposure to global supply-chain shocks.
Source: The Financial Express
