In a welcome move with strategic implications, the Union road transport ministry is roping in agencies such as DRDO, Isro and IIT-Kanpur to carry out research in new battery technologies to reduce India’s dependence on China for lithium-ion batteries. China is a world leader in this sector, controlling over 80% of the world’s raw material refining, 77% of the world’s cell capacity, and 60% of the world’s component manufacturing. And it’s on the strength of this lithium-ion battery manufacturing capacity that China is looking to dominate the global electric vehicle (EV) market.
With the EV revolution knocking at our door, India must move quickly to ensure that its own EV industry isn’t forced to dance to the tunes of Chinese suppliers. In fact, India has an opportunity here to leapfrog lithium-ion batteries – known to occasionally burst into flames – and invest in rechargeable aluminium batteries that charge faster and have a longer life. And if government identifies this as a priority strategic area and provides the right inputs – subsidies, land, power etc – India could emerge as an alternative hub for the global rechargeable battery supply chain.
Similarly, another strategic area that government would do well to hand hold is semiconductor manufacturing. Semiconductor chips are used in everything from smartphones to cars and military equipment. Annually, China consumes 50% of all semiconductors and has set the goal of becoming a global leader in all segments of the semiconductor industry by 2030. The recent global shortage of semiconductor chips – which has hit the automobile sector hard – shows how vital this industry is. But here too India has an opportunity to lay the foundation of a vibrant semiconductor industry by leveraging its huge market.
In fact, government in December had invited proposals from companies to set up semiconductor fabrication facilities in the country. But semiconductor manufacturing is a capital intensive process with a substantial gestation period. For example, Taiwan’s TSMC – the world’s largest contract chip manufacturer – is the product of the Taiwanese government’s concerted efforts at semiconductor manufacturing since the 1970s. If Taiwan, a nation of 23 million people, can become a semiconductor powerhouse, India can certainly take advantage of its scale here. Identifying rechargeable batteries and semiconductors as strategic areas for Atmanirbhar Bharat is a good idea. Given that China today is our main strategic rival, we cannot have Beijing dominate us in these two sectors. It is a national security imperative.
This piece appeared as an editorial opinion in the print edition of The Times of India.
END OF ARTICLE