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Relevance: GS Paper III — Economy, Energy Security & Critical Minerals Source: The Hindu / NITI Aayog, 2026

1 · What happened

India’s electric vehicle (EV) market is growing fast. In FY26 alone, around 2.5 million EVs were sold, helped by purchase subsidies, road tax cuts and demand schemes.

But there is a catch. India is cutting its oil import bill, only to land in a new trap — heavy dependence on imported lithium-ion batteries, mostly from China. The next step is to build India’s own battery supply chain.

2 · India’s EV Battery Story

EV batteries need critical minerals — Lithium, Cobalt, Nickel and Graphite. India has very little of these in the ground, so we depend on imports. The two main battery types used today are LFP and NMC.

Institutional Anchor
KABIL
Khanij Bidesh India Limited (2019) — a joint venture of NALCO + HCL + MECL under the Ministry of Mines. It buys mineral blocks abroad (Argentina, Chile, Australia) to secure lithium and cobalt for India.
Demand Push
PM E-DRIVE Scheme
Successor to FAME-II. Has a ₹10,900 crore outlay (2024–2026) for e-2Ws, e-3Ws, e-buses, e-trucks and e-ambulances. ₹2,000 cr is for setting up public charging stations.
Supply-Side Push
ACC PLI Scheme
The Advanced Chemistry Cell (ACC) Production Linked Incentive scheme supports Indian battery factories. 40 GWh has been awarded, but only about 1 GWh is actually running today — execution is slow.
The Big Risk
China Concentration
In 2025, India imported 7,987 MWh of batteries, mostly from China. Tighter export rules, removal of VAT relief in China and West Asia tensions can push up costs and delay price parity with petrol/diesel cars.

  • LFP vs NMC: LFP (Lithium Iron Phosphate) is cheaper and safer — used in mass-market EVs but dominated by China. NMC (Nickel Manganese Cobalt) gives longer range and offers a “China + 1” sourcing chance.
  • Sodium-ion batteries: Use abundant sodium instead of lithium. Not a full replacement yet, but a useful backup that reduces India’s lithium dependence.
  • Battery right-sizing: Designing EVs with battery sizes that match real Indian travel patterns, instead of copying oversized foreign models.

UPSC Value Box
Critical Minerals Minerals essential for clean energy and high-tech goods — for EV batteries the key ones are Lithium, Cobalt, Nickel and Graphite.
Lithium Triangle The region of Argentina, Chile and Bolivia that holds the world’s largest lithium reserves. KABIL is actively pursuing blocks here.
KABIL Khanij Bidesh India Limited — JV of NALCO, HCL and MECL under the Ministry of Mines (2019). Acquires overseas critical mineral assets.
National Mission — Transformative Mobility Chaired by the CEO of NITI Aayog. Designs the Phased Manufacturing Programme (PMP) to localise EV production and set up battery Giga plants.
ACC PLI Scheme Advanced Chemistry Cell — Production Linked Incentive. Encourages domestic battery cell manufacturing. 40 GWh awarded; ~1 GWh installed.
PM E-DRIVE Successor to FAME-II; ₹10,900 crore outlay for 2024–26. Supports e-2Ws, e-3Ws, e-buses, e-trucks, e-ambulances and public charging.
LFP vs NMC Lithium Iron Phosphate: cheap, safe, mass-market. Nickel Manganese Cobalt: higher range, premium EVs.

MCQ Practice Question
Q. With reference to India’s electric vehicle (EV) ecosystem, consider the following statements:

  1. Khanij Bidesh India Limited (KABIL) is a joint venture of three Central Public Sector Enterprises set up under the Ministry of Mines to acquire strategic mineral assets abroad.
  2. The PM E-DRIVE Scheme is the successor to the FAME-II scheme and provides demand incentives for electric two-wheelers, three-wheelers, ambulances, trucks and buses.
  3. The Advanced Chemistry Cell (ACC) Production Linked Incentive Scheme is implemented by the Ministry of Petroleum and Natural Gas and aims to subsidise the import of finished lithium-ion batteries.

Which of the statements given above is/are correct?
(a) 1 and 2 only    (b) 2 and 3 only    (c) 1 and 3 only    (d) 1, 2 and 3

Answer: (a) 1 and 2 only

  • Statement 1 — Correct: KABIL was set up in 2019 under the Ministry of Mines as a JV of NALCO, HCL and MECL to acquire overseas critical mineral blocks (lithium, cobalt etc.).
  • Statement 2 — Correct: PM E-DRIVE replaced FAME-II with a ₹10,900 crore outlay (2024–26) for demand incentives across e-2Ws, e-3Ws, e-buses, e-trucks and e-ambulances, plus public charging.
  • Statement 3 — Incorrect (the trap): The ACC PLI scheme is run by the Ministry of Heavy Industries (not Petroleum and Natural Gas), and its purpose is to boost domestic manufacturing of advanced battery cells — not to subsidise imports.

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