Synopsis: Significance of shifting towards electric vehicles for India and how the government has actively facilitated this process
What are the significances of shifting to electric vehicles for India?
Transition to electric vehicles is important for India as not only it will save public money but also the environment.
- The progression to electric vehicles will make India sustainable as it has the potential to reduce carbon emissions and build self-reliant domestic energy sector.
- it can reduce dependence on crude oil and help to save government money especially the FOREX. For example, India is the third-largest oil importer in the world in terms of value. In 2018–19, India imported 228.6 MT of crude oil worth $120 billion.
- Besides being an economically and environmentally viable option, India’s transition to electric vehicles will also allow us to improve our infrastructure.
- This will also have a significant impact on our foreign policy as our energy security dependence will shift from West Asia to Latin America.
In India, In the last two years, lithium imports have tripled from $384 mn to $1.2 bn and its demands are being fulfilled by imports from China, Vietnam, and Hong Kong.
- Latin America’s famous lithium triangle Argentina, Chile, and Bolivia, encompasses about 80% of the explored lithium of the world.
- Currently, India’s majority of trade from Latin America is concentrated on crude oil which includes 14%-20% of India’s total crude oil imports which is likely to change towards Lithium and cobalt.
- government is looking to buy overseas lithium reserves to develop domestic battery manufacturing capacity.
- In 2019, a joint venture agreement was signed between three Indian CPSE’s (National Aluminium Company (NALCO), Hindustan Copper Limited (HCL) and Mineral Exploration Corporation Ltd (MECL)) to form Khanij Bidesh India Limited (KABIL) that has the objective to explore strategic mineral assets like lithium and cobalt abroad for commercial use and to meet the domestic requirement for battery manufacturers.
What were the steps taken by government to facilitate the shift towards electric vehicles?
With the vision to have 30% electric vehicles plying the roads by 2030 the government of India has taken up the following initiatives.
- First, under the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles and Fame 2.0, the government has allocated $1.3 billion in incentives for electric buses, three-wheelers and four-wheelers to be used for commercial purposes till 2022, and earmarked another $135 million for charging stations.
- Second, NITI Aayog has proposed for a $4.6 billion subsidy for battery makers to facilitate domestic manufacturing of Lithium batteries.
- Third, In September 2019, government gave its nod to set up a manufacturing unit in Gujarat by Japanese consortium (Suzuki Motor+ Denso+ Toshiba) to venture into the production of lithium-ion batteries and electrodes.
The Indian government’s pre-emptive policy action will not only help the lithium and cobalt industry to grow domestically but also help India to chalk out a long-term solution to clean our cities, build new markets, and skill people for new jobs towards an ‘Atmanirbhar Bharat’.
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