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GTRI warns of India becoming an 'EV colony' for China
Industry News- Sep 10,24
GTRI urged the government not to rush into providing significant incentives, warning that doing so could increase India's reliance on Chinese imports.
India should allow its electric vehicle (EV) sector to grow organically without heavy reliance on incentives to avoid becoming an ‘EV colony’ for China, according to a statement from the Global Trade Research Initiative (GTRI) on Friday. The think tank emphasised that India faces unique challenges in adopting EVs on a large scale, including heavy dependence on fossil fuels for electricity, frequent power outages, and reliance on imports for batteries and critical minerals.
GTRI urged the government not to rush into providing significant incentives, warning that doing so could increase India's reliance on Chinese imports. Allowing market forces to drive the growth of the EV sector would help the country carve out its own path in the global EV landscape, free from dependence on China.
The think tank also highlighted the global shift in the EV market, driven by higher tariffs and restrictions on Chinese imports in the US, EU, and Canada. In response, China is moving its production to ASEAN countries and eyeing India as a potential market. However, concerns remain that production units in these regions still rely on 70-80% of parts, including batteries, from China.
Ajay Srivastava, Founder, GTRI added that India could also face the risk of excess Chinese EVs being dumped in the market, as access to developed countries becomes more restricted. To strengthen India's position, the think tank recommended focusing on advanced battery technologies, battery recycling infrastructure, and clean energy to power EV charging stations. These steps would allow India to lead the next phase of the EV revolution.
Deep Kapuria, Chairman, Hi-Tech Gears noted that the global EV market is undergoing significant structural changes, with countries offering subsidies and tax benefits to promote electric cars. The availability of critical minerals, such as lithium, cobalt, and nickel, will also play a key role in shaping the industry’s future.
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