Lithium is a critical component used in the production of batteries for electric vehicles, cell phones, computers, and other gadgets. With its use case spanning the domains of defence, aviation and energy, it is viewed as a strategic material. India recently revealed its first significant finding of lithium reserves in Jammu and Kashmir.

The demand for essential metals like lithium and cobalt is predicted to increase by roughly 500 percent by 2050. Currently, the majority of the world's lithium is supplied by China, Australia, Chile, and Argentina. India imported lithium batteries worth $1.2 billion in 2019–20, up from $384 million in 2017, according to the Ministry of Mines. With 5.9 million tonnes of lithium found in India, the government has announced that the reserve is of exceptional quality. However, the extraction of the metal is expected to be a time-consuming process. As per the officials, the reserve has undergone a G3 level study, which will be followed by a G2 and G1 study before the final extraction of the metal can take place. This detailed approach will ensure that the extraction is done in a careful and systematic manner, with a thorough understanding of the geology and other factors that may impact the process.

The India Opportunity

The discovery of Lithium reserves in the Salal-Haimana region in Jammu and Kashmir's Reasi district will have significant implications for the Indian economy, especially the electric vehicle industry and battery manufacturing industry. The global electric vehicle market, heavily dependent on Lithium, is projected to reach $823.75 billion by 2030, registering a Compounded Annual Growth Rate (CAGR) of 18.2 per cent from 2021 to 2030. The Indian electric vehicle market is poised to grow at a CAGR of 23.76 percent by 2028. India is projected to have 6.8 million electric vehicles on its roads by 2030, up from 0.5 million in 2020. Lithium and batteries would be needed in enormous quantities for India to achieve the aforementioned goal.

Foreign Direct Investment (FDI) in the battery manufacturing sector has been pouring into India, with major companies such as Suzuki, Toshiba, and Denso from Japan having made substantial investments in the Indian market. The government has relaxed FDI norms permitted FDI up to 100 percent under automatic route in the manufacturing of ACC batteries, signalling its commitment to making India a favourable destination for foreign investment in the electric vehicle industry. This move is part of the Indian government's larger vision to make India a global manufacturing hub and a leading player in the electric vehicle market.

Government Initiatives

The government’s supportive policies and initiatives have been encouraging the growth of the domestic battery manufacturing. Khanij Bidesh India Ltd (KABIL), a joint venture business with the participation of three Central Public Sector Enterprises has been established to identify, acquire, develop, and process critical minerals and metals such as lithium, cobalt, copper, and nickel, which are essential for the growth of various industries, including electric vehicles and renewable energy. KABIL operates both in India and abroad, and its primary objective is to reduce India's dependence on imports of critical minerals and metals, aligning with the vision of Atmanirbhar Bharat. The company is also expected to contribute to the Indian economy by creating employment opportunities, promoting domestic manufacturing, and enhancing the country's strategic reserves of essential minerals and metals. The government has also launched the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, which provides incentives for the adoption of electric vehicles. The Union Budget 2023 has allocated INR 51.72 billion (approximately $ 631 million) towards its FAME-II scheme to subsidize and promote the adoption of clean energy vehicles. The government has allowed 100 percent FDI in electric mobility and encouraged domestic manufacturing of battery packs. Due to this measure, LiB technology has overtaken lead-acid batteries in mobile and stationary applications. Additionally, the government has established a National Mission on Transformative Mobility and Battery Storage to facilitate research and development in the field.


In conclusion, India's recent discovery of lithium reserves is a significant step towards achieving energy security and environmentally friendly transportation. The Indian government has taken a comprehensive approach towards the growth of the battery sector, with initiatives such as FAME and KABIL, providing opportunities for foreign investors to invest in this growing sector. India's lithium reserves and the government's initiatives bode well for the country's energy security and economic growth in the coming years.

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