Whalesbook
China's Tech Hurdles
The impasse stems from China's requirement for State Council licenses before transferring core battery manufacturing technology overseas. This hurdle is proving significant not only for Reliance Industries' ambitions in green hydrogen storage but also for established players like Exide Industries Ltd. and Amara Raja Energy and Mobility Ltd., both seeking Chinese expertise for their own lithium-ion cell production. Xiamen Hithium Energy Storage Technology Co. withdrew from partnership talks with Reliance, highlighting Beijing's tightening grip.
'Make in India' Under Pressure
This dependency underscores the limitations of Prime Minister Narendra Modi's "Make in India" industrial policy. Despite Rs 18,100 crore ($2 billion) earmarked for fiscal incentives to establish 50 gigawatt-hour (GWh) of cell production capacity, only 1 GWh has materialized to date. Concurrently, imports of lithium-ion cells by Indian EV makers and other sectors have surged 2.5 times to $3 billion, with China supplying a dominant 75% of this volume. Reliance stated its alternative-energy plans are proceeding, with a 40 GWh battery storage system assembly and cell manufacturing factory commissioning in phases, aiming eventually for 100 GWh capacity.
Rare Earth Dependencies and Competition
Beyond batteries, China's control extends to rare earth elements crucial for manufacturing. Beijing's export curbs have previously given it leverage against the United States, and similar restrictions could easily impact India. New Delhi's proposed $800 million in subsidies for local magnet production faces skepticism, as India possesses significant reserves but limited mining and processing capabilities. This reliance on foreign technology and materials weakens India's competitive edge, even in neighboring markets like Nepal, where Chinese EVs are rapidly displacing Indian brands due to superior quality and price.