Government's economic assessment discusses how countries are securing access to materials needed for electric vehicles amid geopolitical concerns
29 Jan 2026 | 347 Views | By Arunima Pal
The Economic Survey 2025-26 has documented intensifying international competition for critical minerals required for electric vehicle batteries and other advanced technologies, noting that countries are "securing critical minerals and technological resources in a manner reminiscent of a new colonial scramble."
The Survey, released on January 28, discusses critical minerals ...
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The Economic Survey 2025-26 has documented intensifying international competition for critical minerals required for electric vehicle batteries and other advanced technologies, noting that countries are "securing critical minerals and technological resources in a manner reminiscent of a new colonial scramble."
The Survey, released on January 28, discusses critical minerals as part of its broader analysis of supply chain realignment and strategic competition in emerging technology sectors.
The Survey notes that "countries are increasingly focusing on emerging strategic industries such as renewable energy, electric vehicles, critical minerals, semiconductors, and AI" with these sectors "viewed as critical for economic growth, national security and supremacy." This framing positions electric vehicles not just as a transportation technology but as a strategic sector subject to geopolitical competition.
While the Survey does not provide extensive detail on specific minerals, critical materials for EV batteries typically include lithium, cobalt, nickel, and rare earth elements. These minerals have concentrated geographic sources, creating supply security concerns.
The Survey notes that "perceptions of geopolitical risk" are driving "diversification of critical minerals, telecom infrastructure goods" and that supply chains "are being restructured to ensure technological autonomy and independence."
While not explicitly about critical minerals for batteries, this illustrates how supplier countries can use export controls for strategic purposes, affecting automotive supply chains. The Survey observes that supply chains "are being restructured to ensure technological autonomy and independence" with "perceptions of geopolitical risk" as a driver.
The Survey also cites UNCTAD data showing "resurgence in friendshoring in CY 2025" and notes "intensifying competition for rare earth minerals." Rare earth elements are used in EV motors and other advanced automotive systems, making their supply security important for EV production.
This could affect which countries succeed in securing reliable access to EV battery materials at competitive prices.
The Survey discusses India's PLI scheme for Advanced Chemistry Cell (ACC) batteries with ₹18,100 crore outlay for 50 GWh capacity. It notes this is "localising ACC manufacturing, with 40 GWh capacity already awarded, strengthening the EV ecosystem."
However, battery manufacturing requires critical mineral inputs, meaning localized manufacturing doesn't eliminate import dependence for raw materials. The Survey notes countries are "advancing state support, including as equity investments, into bigger industrial players" in strategic sectors.
This suggests governments worldwide are using state resources to secure positions in EV supply chains, including potentially taking equity stakes in mining or processing operations.
Automakers' decisions about where to locate EV and battery production may be influenced by proximity to mineral supplies or processing facilities, in addition to traditional factors like labor costs and market access.
The Survey's trade analysis shows ACC batteries with 45% export growth but 24.9% import growth during FY21-FY25, indicating "scaling up of production capacity and the integration of value chains."
This pattern suggests India is building battery manufacturing but still requires imported materials or components, consistent with critical mineral import dependence.
The Survey discusses both technological resources and critical minerals, suggesting two distinct challenges:
India faces both challenges in building EV supply chains.
India's approach to securing critical mineral access likely involves strategic partnerships with mineral-rich countries. The Survey discusses trade agreements and diplomatic initiatives that could facilitate such partnerships. The recent Oman FTA, for example, could be relevant to broader strategic relationships in the Middle East region where some critical minerals are found or processed.
Additionally, competition for critical minerals can create price volatility. The Survey does not discuss mineral prices, but volatility in inputs like lithium affects EV economics and the pace of adoption.Manufacturers may face margin pressures if mineral prices rise significantly while EV selling prices remain competitive. The Survey's reference to sectors being viewed as critical for "national security and supremacy" indicates that mineral supply security is being treated as a strategic issue beyond commercial considerations.
This framing suggests government involvement in securing supplies rather than leaving it entirely to market mechanisms.
Supply constraints or high prices for critical minerals could affect EV adoption timelines if they make EVs uncompetitive with internal combustion vehicles on total cost of ownership.
The Survey's documentation of 62.5% CAGR in EV registrations shows strong adoption so far, but sustained growth requires managing mineral supply challenges.
The Survey discusses tariff uncertainties and trade policy volatility. For critical minerals, trade policy can affect access and costs.
Any tariffs or restrictions on mineral imports would increase costs for domestic EV production. Conversely, export restrictions by mineral-rich countries could constrain supply.
The Survey's emphasis on "technological autonomy and independence" suggests countries want control over EV supply chains for sovereignty reasons, not just cost considerations.
For India, this implies policy will prioritize supply security even if purely market-based sourcing might be cheaper in the short term.
The Economic Survey's discussion of intensifying competition for critical minerals highlights a structural challenge for EV adoption globally and in India specifically.
While India is building battery manufacturing capacity through schemes like the ACC PLI, the underlying dependence on imported critical minerals remains a supply chain vulnerability.
The Survey's framing of this competition in strategic terms—linked to national security and autonomy—suggests it will be a persistent policy priority rather than a purely commercial concern left to market forces.