Since then, there have been multiple global events \u2013 hurricanes and wars \u2013 that have resulted in fuel price fluctuations. This year, the closure of the Strait of Hormuz amid the US-Iran war has led to yet another massive global fuel crisis, exposing regional and global cooperation on e-mobility.<\/p>\n\n\n\n
India has had to revise fuel prices four times since 15 May. The fuel shortage has also prompted Prime Minister Narendra Modi to announce austerity measures, requesting people save fuel by using public transport, carpooling and avoiding foreign travel.<\/p>\n\n\n\n
Every global crisis creates a \u201cdouble whammy effect\u201d, says Nikit Abhyankar, co-author of a UC Berkeley report<\/a> on India\u2019s oil-guzzling transportation sector. \u201cPrice of crude oil rises, and it also weakens Indian rupee. A 10% rise in crude oil and a 5% depreciation of the rupee means the cost of crude oil gets expensive by more than 15%,\u201d he tells Dialogue Earth. Since the US-Iran war, the rupee has declined nearly 5.5%<\/a> against the US dollar.<\/p>\n\n\n\n The report observes that a transition to electric vehicles (EVs) could reduce crude oil imports to India by over 90%, saving USD 240 billion annually, by 2047. But India is still a low-adoption country, with EVs still out of reach for many.<\/p>\n\n\n\n EV sales in India rose to merely 2.08 million<\/a> in 2024, from 50,000 in 2016, according to Niti Aayog, a government think-tank, casting serious doubts<\/a> on India\u2019s 30% EV target for the transportation ecosystem by 2030. \u00a0<\/p>\n\n\n\n On average, battery EVs and hybrids cost about INR 1-2 lakh (USD 1,000-2,000) more than internal combustion engine cars, primarily due to the high battery cost. \u201cThat\u2019s almost half of my annual income,\u201d says Pankaj Kumar, another cab driver. \u201cI want to own a hybrid electric car, but I don\u2019t see many charging stations within the city and on highways.\u201d<\/p>\n\n\n\n India is yet to get on the battery manufacturing fast track. The country has achieved only 2.8% of its incentive-linked battery manufacturing targets, according to a January 2026 study<\/a> put together by think-tank the Institute for Energy Economics and Financial Analysis (IEEFA). A series of lapses, coupled with a lack of policy-level coordination, has plagued battery manufacturing, the study shows.<\/p>\n\n\n\n Besides, India imported USD 1.8 billion of lithium-ion batteries in 2022, 85% of which came from China.<\/p>\n\n\n\n Notably, on 10 March, India relaxed foreign direct investment restrictions on land-bordering countries imposed during the Covid-19 pandemic. This paves the way for Chinese investment in selected industries, including battery manufacturing, and eases bottlenecks for collaboration.<\/p>\n\n\n\n China\u2019s overcapacity in battery manufacturing and a slowdown in domestic demand, coupled with the African demand for Indian-made vehicles, might just create the right conditions for India to expand its e-mobility sector.<\/p>\n\n\n\n Despite the financial benefits of reducing fossil fuel imports and curtailing toxic emissions that choke Indian cities, EV penetration hasn\u2019t risen as expected.<\/p>\n\n\n\n To tackle this issue, the Indian government launched a USD 2.47 billion<\/a> production-linked incentive (PLI) scheme in 2021, under the Atmanirbhar Bharat (Self-Reliant India) initiative. The idea was to incentivise domestic battery manufacturing to make EVs affordable and increase adoption.<\/p>\n\n\n\n But there were a few hiccups. The scheme\u2019s beneficiaries faced significant supply chain and implementation bottlenecks, such as stringent domestic value-addition requirements and an aggressive two-year installation timeline, leading to delays in commissioning capacity, the IEEFA study notes.<\/p>\n\n\n\n The incentive also botched the selection of beneficiaries. In 2022, one of those picked, Hyundai Global Motors, withdrew its bid after Hyundai Motor India stated that the other company was in no way related to it or the renowned South Korean firm, Hyundai Motor Company.<\/p>\n\n\n\n The rest of the beneficiaries, Ola Cell Technologies, Reliance New Energy, Rajesh Exports, and ACC Energy Storage, had no experience in the battery manufacturing sector. Experienced battery makers like Exide and Amara Raja participated but were not selected in the auction, signifying design gaps in the scheme, says Charith Konda, co-author of the IEEFA study. \u201cBeneficiaries also needed Chinese engineers and technicians to set up plants, but there were significant delays in visa approvals.\u201d<\/p>\n\n\n\n According to the India Energy Storage Alliance (IESA), an industry platform for energy storage and electric mobility with over 100 energy companies as members, the PLI scheme had been implemented more slowly than anticipated due to the complexities of battery cell manufacturing. The sector is capital-intensive, with long gestation periods and significant reliance on technology partnerships. \u201cWhile technology transfer has taken time to materialise, gaps in skilled workforce availability, limited focus in the initial phase on upstream supply chain development, and volatility in the global geopolitical environment have also impacted timelines,\u201d the IESA wrote in a consolidated written response to Dialogue Earth.<\/p>\n\n\n\n \u201cThe PLI scheme has nevertheless played an important role in catalysing investments and initiating domestic capacity creation,\u201d they said.<\/p>\n\n\n\n The relaxation of foreign direct investment, the IESA noted, could now accelerate e-mobility in India by bringing in capital, advanced technologies, and integration with global supply chains. But \u201cappropriate safeguards may be required to avoid over-dependence on a single geography and to ensure resilience, transparency and long-term supply chain security\u201d, the IESA said.<\/p>\n\n\n\n While India is in a slow lane for battery manufacturing, China is making four times<\/a> the number of batteries demanded by the country\u2019s EV makers.<\/p>\n\n\n\n On 27 March, Chinese EV manufacturer BYD, one of the world\u2019s largest EV players, recorded a drop in profit for the first time<\/a> in four years due to slowing domestic demand and fierce domestic competition.<\/p>\n\n\n\n Concerned by the demand slowdown, major Chinese EV manufacturers started looking out a few years ago.<\/p>\n\n\n\n In 2023, BYD submitted a USD 1 billion investment proposal<\/a> to set up an EV plant in Hyderabad, but India rejected the proposal, citing security concerns<\/a>.<\/p>\n\n\n\n However, joint ventures of Chinese and Indian companies assemble some of the most prominent EVs in India. Indian steelmaker JSW and Chinese manufacturer SAIC Motor work together under the popular MG Motor brand. \u201cIn 2024, the joint venture produced about half of its electric cars sold in India domestically, while the other half were imported from China,\u201d noted an International Energy Agency report<\/a>.<\/p>\n\n\n\n \u201cRather than relying on imports of EVs and battery components from China, India should leverage the improving bilateral ties to attract Chinese investment and technical expertise for domestic manufacturing of EVs and components,\u201d says Konda.<\/p>\n\n\n\n But India-China relations are delicate at best. A trust deficit persists due to their long history of geopolitical tensions.<\/p>\n\n\n\n Suranjali Tandon, an associate professor at the National Institute of Public Finance and Policy, observes a narrowing gap between inflows and outflows in foreign direct investment from China. This, she says, has contributed to India\u2019s decision to relax its investment rules for land-bordering countries. But there continues to be \u201cscepticism about the collaboration\u201d between the two nations, she adds.<\/p>\n\n\n\n While India navigates this challenging but co-dependent relationship, it has the opportunity to grow its e-mobility market outside of India in African nations, perhaps in collaboration with China. Countries in the Global South face similar policy challenges, and India, with its robust economic and diplomatic ties to African nations, is well-positioned to help decarbonise the continent\u2019s transportation sector, says Akanksha Golchha, a Centre for Strategic International Studies fellow and co-author of a report<\/a> on India-Africa electric mobility partnership. <\/p>\n\n\n\n Data shows India and Africa share a similar e-mobility landscape; about 85%<\/a> of the registered vehicles in Burkina Faso and 70% in Uganda are two-wheelers.<\/p>\n\n\n\n Indian automobile companies are not only starting to dominate Africa\u2019s two- and three-wheeler markets but are reportedly<\/a> doing this at the expense of Chinese competition. Bajaj Auto dominates this segment in over a dozen African markets, with a 40% market share, according to the Economic Times.<\/p>\n\n\n\n Other companies, such as Mahindra & Mahindra, TVS and Tata Motors, have assembly lines in various African countries, utilising locally sourced components to produce automobiles, boosting trade and diplomatic relations between the governments of African countries and India.<\/p>\n\n\n\n \u201cIndia and Africa share similar transportation systems and challenges, which makes Indian two-wheelers and three-wheelers a roaring success in many African countries, built for varying road terrains, high fuel efficiency and low maintenance,\u201d says Golchha.<\/p>\n\n\n\n Transport on the continent guzzles oil, accounting<\/a> for 69% of total final consumption of oil products. Researchers suggest that accelerating South-South cooperation to phase out internal combustion engine vehicles, which constitute 90%<\/a> of Africa\u2019s transportation fleet, could save millions of dollars in crude oil costs and liberate the local population from air pollution.<\/p>\n\n\n\n While India expands its footprint in the African market, laying down the groundwork for the pipeline dream that is electric mobility, EV adoption continues to be a challenge back home.<\/p>\n\n\n\n For now, Ramsurat will need to switch between petrol and compressed natural gas, the two fossil-fuel options provided by the government, until EVs become affordable.<\/p>\n\n\n\n \u201cI fear by then I\u2019ll retire,\u201d he says.<\/p>\n","protected":false},"excerpt":{"rendered":" India\u2019s new foreign investment policy, China\u2019s slowing battery demand, and the African market create a new opportunity in India<\/p>\n","protected":false},"author":2783,"featured_media":60138030,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[757],"tags":[13444,547],"hashtags":[],"country":[20000110,20000111],"class_list":["post-60138012","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","tag-electric-vehicles","tag-fossil-fuels","country-china","country-india"],"acf":[],"yoast_head":"\nIndia\u2019s incentives<\/h2>\n\n\n\n
![\"driver](\"https:\/\/dialogue.earth\/content\/uploads\/2026\/06\/20260410_India-Ramsurat-Cab-Driver_AlokGupta.jpeg\")
<\/div>China\u2019s collaboration<\/h2>\n\n\n\n
![\"multiple](\"https:\/\/dialogue.earth\/content\/uploads\/2026\/06\/New-Delhi-traffic_Alamy_F3KHKM.jpg\")
<\/div>African ambitions<\/h2>\n\n\n\n