Context: The progression to electric vehicles is important for India as they are sustainable and profitable.
Electrification of road transport in India: ensuring electric mobility -
Benefits:
An economically and environmentally viable option for India; (Lithium is also used as a drug to treat bipolar disorder)
Builds domestic energy independence: and will allow India to fine-tune its infrastructure by reducing imports of crude oil (especially from West Asia)
India is the third-largest oil importer in the world in terms of value (imported 228.6 MT of crude oil worth $120 billion in 2018–19).
Employment: through new skills.
Concerns:
Overdependence on imports: from China, Vietnam, and Hong Kong.
Growing demand for lithium (tripled from $384 mn to $1.2 bn): which is catered by imports and not by the domestic industry.
Significance of Latin American countries: in terms of lithium resource and exports:
India’s biggest trading partners in Latin America are Brazil, Mexico, and Venezuela;
Majority of trade is concentrated on crude oil which includes 14%20% of India’s total crude oil imports; (This might shift towards Lithium and Cobalt).
Lithium triangle: encompasses lithium deposits under the salt flats of northwest Argentina, northern Chile, and southwest Bolivia and holds about 80% of the explored lithium of the world.
Initiatives by Indian Government:
The Faster Adoption and Manufacturing of Hybrid and Electric Vehicles-2 (FAME 2):
Aim: to achieve 30% of electric vehicles plying the roads by 2030.
Financial allocation: $1.3 billion in incentives for electric buses, three-wheelers and four-wheelers to be used for commercial purposes till 2022, and earmarked another $135 million for charging stations.
Khanij Bidesh India Limited (KABIL): Aims to scout for strategic mineral assets like lithium and cobalt abroad for commercial use and meet the domestic requirement for battery manufacturers.
KABIL was formed In 2019, by India’s National Aluminum Company (NALCO), Hindustan Copper Limited (HCL) and Mineral Exploration Corporation Ltd (MECL)
Subsidies: NITI Aayog has proposed a $4.6 billion subsidy for battery makers.