Potential Of Lithium In India & How It Can Help The Economy

Lithium in India

Are you aware of the fact that lithium in India is the soul of the production of indigenous rechargeable batteries? The batteries either present in your smartphone or the ones present in electric vehicles, all have lithium at their core. Reason? Lithium ion batteries have numerous exceptional qualities such as fast charging, high power density, light weight, and long lasting battery life.

Lithium in India

Coming to another scenario. Last year, India discovered new lithium reserves in Jammu & Kashmir. What’s so special about it? See, lithium is a rare metal with only 98 million tons of existence. The happy news is, India discovered approx. 5.5% of these resources.

Alright. Then what’s the potential of lithium in India?

The secret lies in the expansion of the Electric Vehicle (EV) industry in India. That’s not all! It can heavily boost our economy too… Stick to this write-up as we will uncover every detail on the potential impact and economic boost offered by lithium in India.

Keep reading!

(A) Synopsis of Lithium in India

As you have read above, India’s recent discovery of 5.9 million tons of lithium in Jammu & Kashmir is no less than a miracle. With a value of INR 34 trillion, this potent reserve of lithium in India marks a significant leap in the nation’s energy landscape. 

Thankfully, this reserve is no ordinary one. Means? Well, it is a high-quality lithium, exceeding the standard grade.

Before delving deeper into it, let’s have a look at the potential of Lithium in India-

AspectPotential of Lithium in India
Resource AvailabilityAbundant lithium reserves in regions like Rajasthan, Karnataka, Jammu and Kashmir 
Lithium Reserves in India5.9 million tonnes
Electric Vehicle (EV) GrowthRising demand for lithium-ion batteries due to the push towards electric vehicles.
Electric Vehicle Market Size  by 2030$823.75 billion
Renewable Energy StorageIncreasing need for lithium in energy storage solutions, supporting the growth of renewable energy.
Government InitiativesNational Mission on Transformative Mobility and Battery Storage to promote electric mobility.
Indian EV market growth rate by 202823.76% CAGR 
Mining and ProcessingInvestments in lithium mining and processing infrastructure for self-sufficiency
Job CreationLithium industry development can contribute to employment generation.
ChallengesEnvironmental concerns in mining, technological challenges, and global market fluctuations.
Strategic ImportanceLithium’s critical role in reducing dependency on fossil fuels aligns with India’s sustainable development goals.
Key Potentials of Lithium in India

Guess what, our lithium reserves hold immense potential for bolstering India’s economy. 

India’s discovery of lithium reserves will have significant implications for the Indian economy, especially the electric vehicle industry and battery manufacturing industry. The Indian electric vehicle market is projected to grow at a CAGR of 23.76 percent by 2028, with 6.8 million electric vehicles on its roads by 2030. 

The government has relaxed FDI norms permitting FDI up to 100 percent under automatic route in the manufacturing of ACC batteries, signalling its commitment to making India a favourable destination for foreign investment in the electric vehicle industry.

Let me tell you another interesting fact!

The lithium reserve of J&K is classified at the prospecting stage (G3) under the United Nations Framework Classification, necessitates further exploration and economic analysis to progress towards production.

This breakthrough promises not only economic gains but also positions India at the forefront of sustainable energy, aligning with global efforts to reduce fossil fuel dependency.

(B) Unlocking the Secret Potential of Lithium in India

Lithium deposits found in India (Lithium in India)

Hold onto your excitement because the lithium party isn’t just happening in Kashmir – it’s a nationwide affair! The Geological Survey of India has uncovered a whopping 5.9 million tons of lithium reserves, and the treasure hunt spans states like Rajasthan and Karnataka. These reserves aren’t just numbers; they are a potential game-changer for India’s energy landscape.

(B.1) Regulations of Mines & Minerals Act

Just like any treasure hunt, there are rules. India’s mineral exploration is choreographed by the Mines and Minerals (Development and Regulation) Act, 1957. Lithium, being the star of the show, dances under the guidance of the Atomic Mineral Concession Rules, 2016. The journey from Reconnaissance permit to Prospecting License to Mining Lease sets the regulatory stage for lithium extraction nationwide.

(B.2) G3 and Beyond: The tale of Lithium in India

While the G3 lithium find in Kashmir is a showstopper, let’s not forget the grand ensemble of lithium reserves scattered across the country. The potential here is not just confined to one state; it’s a symphony of lithium waiting to be explored. The G3 find might take time to shine, but the entire lithium orchestra is gearing up for a performance that stretches far beyond our current imagination.

(B.3) Global Ranking: India in the Spotlight

India isn’t just a participant; it’s a contender on the global lithium stage. With 5.9 million metric tons, we’re set to become the sixth-largest lithium player globally, standing tall among the lithium giants like Bolivia, Argentina, Chile, Australia, and China.

Let’s look at the total reserves of Lithium in different countries-

Countries with Lithium ReservesAmount
(Metric Tons- MMT)
Useful Reserves26
List of Countries with High Lithium Reserves

Looks like Bolivia and Argentina are dominating the lithium reserve space. Surprisingly, despite having vast reserves, they have limited production capacity. You will be astonished with the fact that out of the total reserves, only 14 mines produced good quality lithium i.e. 130,000 tons.

Note: Are you curious to get the details of the battle of EV battery dominance between India and China? If yes, then go through the article India vs China in EV.”

(B.4) Lithium’s Electric Affair: Global EV Surge

Zoom out, and you’ll witness the global electric vehicle (EV) revolution in full swing. Lithium is the star player here, and in 2022, the EV party saw a spectacular 60% surge with 10.4 million units hitting the roads. China, contributing 60%, is the life of this global EV market.

Global EV Market in 2022Statistics
Total Global EV Sales10.4 million units (60% increase from the previous year)
Percentage of Total Vehicles Sold13% (out of 80 million total vehicles sold globally)
China’s Contribution to Total EV Sales60% (6.2 million units)
China’s Growth Rate in EV SalesDoubled in 2022 (compared to the previous year) 
North American EV Sales1.1 million units (50% increase from the previous year)
European EV Sales2.6 million units (11% increase in 2022)
EV (Car) percentage in India1.3%
Global Market Scenario of Electric Vehicles

Governments worldwide are placing their bets on electric vehicles. By 2030, envision a world where 100% of new car sales in the UK, Sweden, and Germany are EVs. France, the US, and others aren’t lagging, eyeing over 40% EV penetration.

Electric cars accounted for only 1.3% in India (FY22). But with the discovery of good quality lithium in India, we can expect the EV production, market and usage to expand rapidly.

Thus, Lithium is not just a part of this revolution; it’s the driving force propelling us into the future.

(C) How the potential of Lithium in India will impact Battery manufacturing?

Let’s dive into the heart of electric vehicles (EVs) – the batteries. There are two main types: lithium iron phosphate (LFP) and lithium nickel manganese cobalt oxide (NMC). The LFP ones are tough and can handle the heat like champions, but they take up more space. On the flip side, NMC batteries are compact but not as heat-resistant. 

Here’s the kicker – LFP batteries are 30% cheaper. But, there’s a catch! China held a patent that limited their global shipment to a mere 25%, despite dominating half of China’s shipments. The plot twist? Those patents expired in CY2022, and that could mean big changes ahead.

(C.1) India’s EV Puzzle: Challenges on the Horizon

Welcome home, where our EV dreams face a trilogy of challenges. First, we’ve been grappling with not having enough raw materials. Second, our power networks have been giving us trust issues. Lastly, we’ve been fashionably late to the tech party. But hey, guess what? The recent discovery of lithium resources might just be the superhero we need to tackle that first challenge!

(C.2) Battery Imports: Our EV Power Play

Today, India imports LiON cells for EVs. Ola, Ather, and TVS get them from LG; Hero and Ampere source theirs from China; and Bajaj and Tata Motors rely on Panasonic. Globally, battery manufacturers do the cell assembly dance, but not us. Ather and Ola do it in-house, while Bajaj, TVS, and Tata prefer a third-party shuffle. 

The smart battery management systems, motors, and control units?  Yep, you guessed it – they’re all imported. TVS and Bajaj, for instance, get theirs from Bosch, who, in turn, imports them.

(C.3) Schemes and Subsidies offered by Indian Govt. for EVs

Now, here’s where it gets interesting. The Indian government is pulling out the stops to jazz up the EV scene. They’ve got a production-linked incentive scheme, especially in advanced cell chemistry. Plus, they’re sprinkling some subsidy magic on the end product under the FAME India Phase-II scheme. Sounds like a good plan, right? Well, there’s a twist – the cost of EVs in India is still quite high as compared to traditional vehicles.

(D) Other Uses of Lithium in India

Now, let’s look at the significance of lithium in other industries apart from EVs-

ApplicationOther uses of Lithium in India
PharmaceuticalsUsed in psychiatric medications, especially for mood disorders.
Glass and CeramicsEnhances the properties of glass and ceramics for durability
Industrial LubricantsLithium-based lubricants reduce friction in industrial machinery.
Air TreatmentEmployed in air purifiers and dehumidifiers due to hygroscopic properties.
Aerospace IndustryUtilized in aerospace for lightweight alloys and high-energy fuels
Aluminum ProductionUsed in the aluminum industry to improve the quality of aluminum
Nuclear ReactorsEmployed in nuclear reactors as a coolant and for tritium production
Greases and PolymersLithium compounds contribute to the stability and performance of greases and polymers.
Primary BatteriesLithium-based primary batteries used in various consumer electronics and medical devices.
Heat-resistant GlassUsed in the production of heat-resistant glass, e.g., in ovenware
Other uses of Lithium in India

Now, you must have understood the diverse applications of lithium beyond electric vehicle battery manufacturing in India.

(E) How can lithium in India help the Economy?

Potential of Lithium in India

Lithium in India can boost our indigenous economy in various ways. Some of the major ones are described below-

(E.1) Reduced Dependence on Imports

The discovery and utilization of lithium in India hold significant promise in reducing the country’s dependency on lithium imports. Currently, India heavily relies on imported lithium to meet the escalating demand for lithium-ion batteries used in electronic devices and electric vehicles. 

By tapping into domestic lithium resources, India can secure a stable and self-sufficient supply chain, mitigating the need for extensive imports. This strategic move not only ensures a consistent availability of this crucial resource but also reduces the nation’s vulnerability to global market fluctuations and supply chain disruptions.

Moreover, diminishing dependency on imports aligns with broader economic goals, curtailing the trade deficit associated with substantial lithium imports. The newfound domestic lithium reservoirs pave the way for local production, positively impacting employment and the overall economy. 

With increased control over the lithium supply chain, India can negotiate favorable terms, potentially driving down costs and promoting economic efficiency. Overall, harnessing domestic lithium resources not only secures the nation’s energy future but also fortifies economic resilience by decreasing reliance on external sources, marking a strategic step towards achieving self-sufficiency in this critical aspect of modern technology.

(E.2) Job Creation and Local Empowerment

The development of lithium reserves in India presents a compelling opportunity for substantial job creation. Lithium mining and processing, integral components of the lithium supply chain, can generate employment in regions where unemployment is a persistent challenge. 

The establishment of lithium-ion battery manufacturing facilities, a natural progression from lithium reserves, will further contribute to job creation in the manufacturing sector. This burgeoning industry demands skilled labor for various processes, from cell assembly to quality control. 

Additionally, the growth of the electric vehicle sector, fueled by domestic lithium, will stimulate job opportunities in research and development, maintenance, and the broader automotive industry. The ripple effect of this job creation extends beyond direct employment, fostering economic empowerment and local development, particularly in areas poised to become key players in India’s lithium economy.

(E.3) Revitalising the Electric Vehicle (EV) Sector

The newfound lithium resources could be a game-changer for India’s ambitious plan to achieve 100% electric vehicle sales by 2030. A robust domestic lithium supply is a key enabler for the growth of the EV sector, creating economic opportunities and supporting the nation’s green transportation goals.

We have already explained this concept in the above sections.

(E.4) Affordability Driving EV Adoption

One of the significant barriers to widespread electric vehicle adoption in India has been the high cost of lithium-ion batteries. The development of domestic lithium resources has the potential to significantly reduce battery costs, making electric vehicles more financially accessible for the average consumer.

(E.5) Emergence of New Industries

The growth of domestic lithium reserves opens the door to the establishment of new industries, particularly in lithium-ion battery manufacturing. This diversification of the economic landscape can contribute to overall economic growth, moving India beyond traditional sectors and fostering innovation.

We will explain it in more detail in the upcoming sections.

(E.6) Sustainable Economic Transition

Developing domestic lithium reserves aligns with India’s broader goal of transitioning to a more sustainable economy. Lithium-ion batteries, crucial for renewable energy systems like solar and wind power, can play a pivotal role in reducing dependence on fossil fuels. This shift supports sustainable economic practices and positions India in the forefront of clean energy adoption.

Thus, the economic benefits of lithium in India extend from reducing import dependence and job creation to revitalizing the EV sector, making electric vehicles more affordable, fostering new industries, and contributing to a sustainable economic transition.

(F) Emergence of New Industries due to Lithium in India

India falling short in EV battery manufacturing

The development of domestic lithium reserves in India can catalyze the emergence of various new industries, each contributing to economic diversification and technological innovation.

(F.1) Lithium-Ion Battery Manufacturing

The primary and most direct impact would be the establishment of lithium-ion battery manufacturing facilities. These facilities would be crucial not only for powering electric vehicles but also for meeting the rising demand for energy storage solutions in various industries.

(F.2) Electric Vehicle Production

With a secure and local supply of lithium, there’s a potential surge in the electric vehicle (EV) manufacturing sector. This includes the production of EVs ranging from cars and two-wheelers to commercial vehicles, fostering a shift towards cleaner and more sustainable transportation.

(F.3) Advanced Energy Storage Systems

Beyond electric vehicles, lithium-ion batteries find applications in various energy storage systems. This includes stationary storage for renewable energy sources like solar and wind, providing a reliable and sustainable power supply for homes, businesses, and industries.

(F.4) Research and Development (R&D) Centers)

The demand for lithium-ion batteries and related technologies opens avenues for research and development centers focused on battery technology. These centers can drive innovation, improve battery efficiency, and explore new applications, contributing to India’s position in cutting-edge technology.

(F.5) Smart Grid Solutions

Lithium-ion batteries play a role in enhancing the efficiency and stability of smart grids. The development of a domestic lithium industry can lead to the creation of companies specializing in smart grid solutions, optimizing energy distribution and consumption.

(F.6) Energy Storage Consultancies

As the need for efficient energy storage grows, consulting firms specializing in energy storage solutions can emerge. These firms could provide expertise on implementing energy storage systems, optimizing their performance, and integrating them into existing infrastructure.

(F.7) Recycling and Sustainable Practices

With the rise in lithium consumption, there’s a growing need for sustainable practices. Industries focused on recycling lithium-ion batteries, extracting lithium from used batteries, and ensuring environmentally friendly disposal can gain prominence.

(F.8) Electric Equipment Manufacturing

The growth in the EV and energy storage sectors can stimulate the manufacturing of various electronic components and equipment, such as electric motors, inverters, and charging infrastructure, contributing to a broader electric ecosystem.

(F.9) Electric Infrastructure Development

The shift towards electric mobility and energy storage demands robust infrastructure. New industries could emerge to cater to the development of charging stations, battery swapping stations, and other essential electric infrastructure components.

(F.10) E-mobility Services

As the EV sector expands, there’s potential for new businesses offering electric mobility services. This could include electric vehicle rental services, charging station management, and innovative solutions to enhance the overall electric mobility experience.

These potential new industries showcase the diverse economic opportunities that can arise from the development of a domestic lithium industry, fostering innovation, creating jobs, and contributing to India’s position in the global clean energy transition.

(G) Way Forward for Potential of Lithium in India

Conclusion of Potential of Lithium in India

It’s time to wrap up! In India, when we talk about electric vehicles (EVs), most of the big players – the ones dealing with the nitty-gritty like cells, power trains, and electronics – are not publicly listed. 

The companies you see on the stock market, like Bosch or ABB, well, EVs aren’t their big money-makers. On the other hand, companies like Hero or Bajaj, and suppliers like Amara Raja, have more at stake in their current businesses than they stand to gain from jumping into the EV game. Investors are a bit skeptical, worried that some companies might go all-in on EVs and not hit the jackpot.

So, what’s the investor strategy? 

It’s a bit like the “spray and pray” game. They’re throwing money at a bunch of companies across the EV industry – from big vehicle manufacturers like Tata Motors to auto part makers like Greaves Cotton and even software developers like Tata Elxsi. 

The result? Some companies are getting crazy high valuations because everyone wants a piece of the potential EV success.

Now, here’s the deal – everyone agrees that electric vehicles are the future. Billions are already invested, and it’s happening. But how exactly it’s going to play out is a bit of a mystery. India, with its recent lithium discovery, has a shot at becoming a big player in the EV game, but the clock is ticking. The next few years? Let’s way and watch the upcoming events!

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Published By: Supti Nandi
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