India Should Let EV Sector Grow Naturally to Avoid Becoming ‘EV Colony’ for China: GTRI

New Delhi, Sep 7 (KNN)The Global Trade Research Initiative (GTRI) has recommended that the Indian government allow the domestic electric vehicle (EV) sector to grow naturally, without relying on heavy incentives, to avoid the risk of becoming an 'EV colony' for China.

 In a report released on Friday, the think tank emphasised that India faces unique challenges in scaling up EV adoption compared to other nations, and rushing in with incentives could lead to increased dependence on Chinese imports.

India’s challenges include the fact that 80% of its electricity is generated from fossil fuels such as coal, along with frequent power cuts, and significant reliance on imported materials for EV production—particularly batteries and critical minerals.

GTRI noted that these factors make the country vulnerable if it pursues a rapid expansion of the EV sector without strengthening domestic manufacturing capabilities.

"Rather than relying on short-term incentives or foreign imports, India should allow its EV market to evolve naturally through market forces. This will prevent India from falling into the trap of becoming overly dependent on China for its EV needs," GTRI said.

The global EV market is currently undergoing a transformation, with the US, EU, and Canada imposing high tariffs on Chinese EV imports. As a result, China is relocating its production to ASEAN countries and setting its sights on India, GTRI cautioned.

However, these production units remain heavily reliant on Chinese components, with up to 80% of parts, including batteries, sourced from China. Thailand has already seen challenges with rising imports and slowing sales after allowing local production by Chinese firms.

GTRI advised that India should focus on advanced battery technology development and battery recycling infrastructure to ensure long-term sustainability.

Increased investment in research and development (R&D) and cleaner energy sources for EV charging could drive the sector’s growth while ensuring the country maintains its independence in this strategic industry.

Hi-Tech Gears Chairman Deep Kapuria echoed these concerns, noting that the global EV market is undergoing significant turbulence due to various macroeconomic and geopolitical factors.

(KNN Bureau)