India Faces Tech Squeeze as China Tightens Global Grip
Reliance Industries and other Indian firms hit by Beijing’s restrictions, exposing vulnerabilities in “Make in India” ambitions
New Delhi, Jan 21: India’s ambitions in alternative energy and electric vehicles face fresh hurdles as China tightens its grip on critical technology transfers. Reliance Industries Ltd., led by Mukesh Ambani, recently paused plans to manufacture lithium-ion cells after Chinese partner Xiamen Hithium Energy Storage Technology Co. withdrew from the deal, Bloomberg reported. The setback affects energy storage projects, including solar powered green hydrogen production, and could ripple across India’s EV industry.
While President Xi Jinping’s restrictions are not aimed specifically at India, they highlight the limits of recent diplomatic thawing between the two nations. Despite resumed flights and meetings between Indian and Chinese officials, Beijing continues to view India as a market for its technology rather than a partner.
China’s export curbs extend beyond lithium-ion cells to electric vehicle battery technology, requiring State Council licenses for overseas transfers. Indian firms such as Exide Industries Ltd. and Amara Raja Energy and Mobility Ltd. are also relying on Chinese knowhow, underscoring the persistent technological dependency.
The “Make in India” initiative has so far struggled to bridge the gap. Incentives worth Rs 18,100 crore ($2 billion) for 50 GWh of battery production have yielded only 1 GWh. Meanwhile, imports of lithium-ion cells have surged 2.5 times to $3 billion, with 75% sourced from China.
Reliance insists its alternative-energy projects remain on track, aiming to commission a 40 GWh battery assembly and manufacturing facility this year, with plans to scale up to 100 GWh annually. However, policymakers are increasingly concerned about India’s reliance on Chinese rare-earths, critical for high-performance magnets, despite $800 million in domestic subsidies.
Even with potential mining expansions, India may still fall short of critical minerals needed for advanced batteries. The challenge is compounded by limited R&D spending by Indian companies, allowing Chinese competitors to dominate markets even in neighboring countries like Nepal, where BYD leads in electric vehicle sales.
Analysts say the technology squeeze is a reminder that India’s industrial ambitions remain constrained by Beijing’s control over knowhow, echoing the broader strategic vulnerabilities that surfaced during India’s pivot away from Russian oil last year.
