But beneath this picture lies a harsh reality.

The country remains heavily dependent on other Asian countries, including China, South Korea, and Japan, for raw materials and rare earth minerals needed to make EV batteries. It also lacks semiconductor chip fabrication plants. 

Industry insiders say capital and policy support are needed if India wants true-blue Made-in-India EVs.

Nitin Gupta, CEO and Co-founder, Attero Recycling, told The Secretariat, “The government must focus on incentivising domestic production now, instead of incentivising the purchase, as the demand for electric vehicles has already been created.”

Battery Problem

EV battery is one of the main components of the manufacturing process and determines the cost of these vehicles. But even after a decade of EV promotion, India lacks a fully integrated battery supply chain. 

The country remains heavily dependent on imported lithium-ion cells from China, South Korea, and Japan, with China accounting for more than three-fourths of imports. Even as battery pack assembly has expanded domestically, the most valuable part of the battery often comes from overseas suppliers.

According to the Ministry of Mines, India is 100% import-dependent for lithium, nickel, and cobalt, the three most critical battery minerals. Around 93% of India's requirement for copper ore and concentrates is met through imports – copper is required for the battery, motor, wiring, and busbars in EVs. 

In 2022-23, India imported 1,119.78 tonnes of lithium oxide and hydroxide worth ₹552.53 crore and 1,025.03 tonnes of lithium carbonate worth ₹179.01 crore. The country also imported 32,298.21 tonnes of nickel worth ₹6,549.34 crore with 100% import reliance, and 171.36 tonnes of cobalt worth ₹72.02 crore with 100% import reliance. 

“The battery accounts for 40% of the total cost of an electric vehicle. The sector is heavily dependent on imports, which creates a challenge. The government should focus on giving incentives for domestic production more than the direct purchases,” Gupta told The Secretariat.

Government schemes such as Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) and the Production Linked Incentive (PLI) programme have tried to encourage domestic manufacturing, but most of the localisation has tended to focus on assembly rather than on upstream manufacturing.  

India has announced gigafactory projects - which are industrial hubs to produce batteries for EVs on a massive scale - but several depend on technology licensing arrangements with foreign companies. For example, battery manufacturer Amara Raja signed a technology licensing agreement with China's Gotion to manufacture lithium-ion batteries in India, highlighting the continuing reliance on overseas engineering.

“Capital and policy will be needed to help facilitate the development of indigenous material science and process engineering knowledge in India, which will take significant risk capital and time. It needs to be suitably nurtured through policy and long-term capital support from government and industry bodies, post which billions could be spent towards scaling the established and proven technologies and processes,” Bharath Krishna Rao, CEO and Co-founder, Emobi, told The Secretariat. 

Semiconductor, Rare Earth Minerals

Battery materials are not the only part of the problem; electric vehicles require advanced semiconductors for battery management systems, motor controllers, and infotainment systems. EV manufacturers continue to depend heavily on imported chips, which creates another layer of strategic dependence.  

According to Suchi Semicon, a Gujarat-based Outsourced Semiconductor Assembly and Test (OSAT) company, building a domestic automotive chip ecosystem requires more than fabrication and packaging facilities. 

One of the biggest barriers is the lack of a fully integrated automotive semiconductor value chain. 

“Automotive chips must meet stringent safety, reliability and quality standards, requiring extensive design validation, testing and qualification processes. While India has strong design talent and is expanding its manufacturing footprint, several critical capabilities across the automotive semiconductor supply chain are still evolving,” said Ashok Mehta, Chairman, Suchi Semicon. 

Another challenge is the continued dependence on imported materials, equipment, and specialised semiconductor components. 

Established hubs in East Asia have spent decades building mature ecosystems that combine manufacturing scale, supply chain resilience, and deep technical expertise, making them difficult to replicate in the short term.

“India is moving in the right direction, but reducing dependence on imported automotive chips will require sustained investments in automotive-grade design, testing, qualification infrastructure and indigenous IP development. A strong and competitive ecosystem will be built through coordinated growth across the entire semiconductor value chain,” he said. 

Another component is rare earth minerals on which electric motors rely. India imported 53,748 metric tonnes of rare-earth magnets in FY25, according to official data. 

However, recognising the vulnerability, the government recently approved a ₹7,280-crore programme to establish domestic permanent magnet manufacturing. 

Why Dependence Persists

The persistence can be attributed to three major reasons. First, India has limited domestic production of critical minerals such as lithium, nickel and cobalt.

Second, refining and processing infrastructure remains underdeveloped. Even when mineral resources are available globally, converting them into battery-grade materials requires specialised facilities, which are available in few countries. 

Third, scale remains a challenge. Chinese manufacturers built capacity years before India entered the EV race, allowing them to achieve significant cost advantages. As a result, Indian manufacturers often find imported components cheaper than locally produced alternatives.

The government, however, is responding. The National Critical Mineral Mission, approved with an outlay of ₹16,300 crore, aims to strengthen exploration, mining, processing, and recycling of minerals such as lithium, cobalt, nickel, and rare earth elements. The government has also auctioned dozens of critical mineral blocks and is pursuing overseas mineral partnerships.

The challenge is no longer manufacturing electric vehicles. It is building the mines, refineries, chemical plants, battery-cell facilities, semiconductor fabrication plants, and magnet factories that sit behind every electric vehicle.

Until that happens, India's EV revolution may carry a Made-in-India label, but the supply chains will continue to begin elsewhere in Asia.