The latest push towards e-mobility is likely to make India more vulnerable in terms of imports. The country does not yet have the infrastructure and resources to make the battery cells that power EVs.

India imported lithium-ion batteries worth US$ 1,193 million during 2020-21. This increased to US$ 4,000 million in FY2025–26, a rise of 235%, according to the Department of Commerce. This is now expected to increase further.

“Industry estimates project India's annual battery requirement to exceed 150 GWh by 2030, with electric two-wheelers, three-wheelers and commercial fleets accounting for the majority of this demand. In the short term, imports will continue to bridge the gap,” Deepak Nanwani, Head of Business at Yuma Energy, told The Secretariat.

A rapid transition to EVs could particularly strengthen China's dominance across the electric mobility supply chain.

At a recent meeting with Prime Minister Narendra Modi, the Secretaries of the renewable energy ministry and steel ministry had voiced worry over cheap imports from China, while underscoring the need to protect domestic players.

Delhi has over 87.6 lakh registered vehicles, including nearly 59.3 lakh two-wheelers, most of them petrol-powered. Two-wheelers and three-wheelers together account for about 42% of vehicular PM2.5 emissions in the capital.

But now Delhi's EV Policy 2026, notified on 1 July, has mandated a phased transition to e-mobility by stopping new registrations of petrol and CNG auto-rickshaws from January 2027 and conventional two-wheelers from April 2028.

E-Mobility And Battery Leasing 

Experts have also pointed out that the new EV policy focuses more on two-wheelers, which fall in the personal EV segment. This undermines the scope for battery leasing, which has shown better results in the commercial EV segment.

Nanwani said the commercial EV market needs more focus because that is where the real advantage of e-mobility lies.

“The only logical way to do that is battery swapping. Instead of putting a three-kilowatt battery in a fixed-battery vehicle, put that three kilowatts in a commercial mobility vehicle, which can remove more pollution from the road,” he added.

He said India has already taken meaningful steps towards domestic cell manufacturing through the 50 GWh Advanced Chemistry Cell (ACC) PLI Scheme, while several private players are establishing gigafactories.

However, building globally competitive cell manufacturing takes time, and commercial-scale production typically requires 3-5 years from project approval.

Demand, however, is growing much faster.

No Commercial Lithium Mining Yet

EV batteries are powered by imported raw materials. But commercial lithium mining has not yet begun in the country, as India is transitioning from exploration to the auctioning and development phases.

While major deposits have been identified, experts estimate it will take at least five to seven years before domestic commercial production yields usable battery-grade lithium.

“We have the resource in Jammu and Kashmir, but we are at least a decade behind in really mining something worthwhile. Because of the mobilisation of resources, local governments have to align, and after that, people have to align,” Ravindra Patki, Partner, Vector Consulting Group, said. 

Imports are the only way out for the time being.

Nanwani said, “Even if you were to discover a mine today, getting the right technology for cell manufacturing may be a few years away. Worrying about that at this point is not correct. Instead, the government should focus on how we can improve the electrification journey even while relying on imports for some time.”

The New EV Policy

Delhi’s EV Policy aims to reduce vehicular emissions - one of the biggest contributors to the capital's air pollution.

Delhi is one of the most polluted cities in the world. Its air quality index (AQI) regularly breaches the 400-mark in winters, putting it in the severely polluted category. The prime causes are vehicular emissions, construction dust, along with stubble burning in neighbouring states. So far, the city has tried to battle toxic spikes in PM10 and PM 2.5 pollutants through the Graded Response Action Plan (GRAP).

The New EV policy specifically targets vehicular emissions.

It offers incentives of up to ₹30,000 for electric two-wheelers, ₹50,000 for electric three-wheelers, and up to ₹1 lakh for scrapping old vehicles and purchasing EVs. It also provides 100% exemption on road tax and registration fees for EVs priced up to ₹30 lakh and targets the installation of 30,000 public charging points.

While the government wants to curb pollution and remove fossil fuel-based vehicles from the roads, over 70% of India’s electricity still comes from thermal power, which is also sourced from coal, a fossil fuel. And this very electricity is used for charging EV batteries.

China leads electric vehicle adoption, with EVs accounting for about 53% of new car sales in 2025, followed by the UK at around 35%, Germany at 30%, and France at 26%.

The United States recorded an EV share of about 10%, while India stood at roughly 4% and Japan at 3%, indicating that despite rapid growth, EV penetration in India remains well below that of leading global economies.