Allow natural growth of India's e-vehicle sector to avoid becoming 'EV colony' for China: GTRI

GTRI urged to let EV sector grow naturally to avoid Chinese dependency, focus on R&D and clean energy sources.

The government should allow the domestic electric vehicle sector to grow naturally without relying on incentives as it would avoid India becoming an 'EV colony' for China, think tank GTRI said on Friday (September 6, 2024).

India faces unique challenges not faced by other countries in adopting EVs (electric vehicles) at large scale, it added.

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These challenges include 80% of electricity generated from fossil fuels like coal, frequent power cuts, and dependency on imports for making EVs in the country like batteries and critical minerals, the Global Trade Research Initiative (GTRI) said.

"Considering these challenges, instead of rushing into the fray with heavy incentives or falling into dependence on Chinese imports, India has the opportunity to let its EV sector evolve naturally. By allowing market forces to steer the sector's growth, India can avoid becoming an 'EV colony' for China and carve out its own path in the global EV landscape," it added.

It also said the global EV market is undergoing a seismic shift, driven by the US, EU, and Canada imposing high tariffs and restrictions on imports of EVs and parts from China.

These regions make up about half of China's global EV exports and in a strategic pivot, China is moving its production to ASEAN countries and setting its sights on India.