India is making its biggest push yet to secure lithium supplies as four state-backed firms enter talks with Chilean miner SQM (Sociedad Química y Minera de Chile) to acquire a 20% stake in two lithium projects in Western Australia. This strategic move, valued at $600 million, highlights India’s urgency in securing critical minerals needed for the booming electric vehicle (EV) industry.

India’s Growing Need for Lithium

As the world’s fastest-growing major economy, India is accelerating efforts to secure lithium, a key component in EV batteries. With a rapidly expanding EV market, India is striving to reduce its dependency on fossil fuels and cut carbon emissions as part of its green energy transition.

Key Players in the Lithium Deal

The Government-backed Khanij Bidesh India Ltd (KABIL) has joined forces with Coal India, Oil India, and ONGC Videsh to explore an investment in SQM’s Mount Holland and Andover lithium projects. The consortium is currently undergoing due diligence and has expressed interest with an initial offer.

If finalized, this deal will mark India’s biggest lithium acquisition overseas, strengthening its position in the global EV battery supply chain. India has been actively pursuing critical minerals agreements in Argentina, Australia, and Chile, with explorations in cobalt-rich Congo also underway.

Strategic Impact on India’s EV Industry

Currently, EV sales in India make up just 2.5% of total car sales but are growing at a 20% annual rate, far exceeding the 5% growth of the overall auto market. Analysts predict that EV sales will double in 2025, making lithium a crucial resource for sustaining this momentum.

Strengthening Global Partnerships

To achieve its strategic mineral goals, India established KABIL, a joint venture between National Aluminium Company, Hindustan Copper, and Mineral Exploration and Consultancy. The organization is actively acquiring and developing critical minerals to meet domestic demand.

Future Outlook

India’s latest move to secure lithium assets is a significant milestone in reducing import dependence on China and strengthening domestic EV manufacturing. If successful, this deal will position India as a strong player in the global lithium supply chain, boosting its EV and renewable energy ambitions.

This deal signifies a major step forward for India in securing critical mineral resources for its future EV ambitions. With ongoing global partnerships and investments, India is well-positioned to become a major player in the lithium supply chain.

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