Can India Build a Resilient EV Supply Chain Without Closing the Materials Loop?

With the rapid growth of EV in India and the government giving incentives to people who are buying vehicles, the critical minerals such as lithium, cobalt, nickel, aluminium and rare earth elements like neodymium, praseodymium, and other 17 elements became equally essential to increase battery production. The high reliance on importing these materials leaves the sector exposed to geopolitical risks and fluctuating commodity prices.

According to the International Energy Agency (IEA), we will need a lot of minerals like lithium, nickel, cobalt, graphite and rare earth elements in the coming years. This is because many countries are making electric vehicles using renewable energy and storing energy in batteries. People often talk about batteries. Rare earth elements like neodymium, praseodymium, dysprosium and terbium are also very important. They help make the magnets that power electric motors and make them go further. China accounts for around 90% of global rare earth magnet production, while the automotive sector has the highest economic exposure to supply disruptions, with more than US$3 trillion worth of downstream manufacturing outside China potentially affected by shortages of rare earth magnets. The IEA also estimates that recycling and secondary supply could reduce primary rare earth mining requirements by up to 35% by 2050, highlighting that resource recovery will be as important as new mining in securing future clean energy supply chains.

However, the global supply chain for these materials remains heavily concentrated. 

China dominates not only the processing of rare earth elements but also the manufacturing of permanent magnets, giving it an outsized influence over global clean energy supply chains. Recent export restrictions on certain rare earth materials have once again exposed how geopolitical developments can disrupt industries far beyond mining, affecting automotive production, manufacturing costs and investment decisions worldwide. 

India's EV Ambitions Cannot Depend on Imported Materials Alone 

For India, this is no longer just a sustainability discussion. It is becoming a question of industrial competitiveness, economic resilience and long-term resource security.

India has made significant progress in positioning itself as a global automotive manufacturing hub. The country is encouraging EV adoption through policy incentives, battery manufacturing programmes and localisation initiatives while attracting investments across the electric mobility value chain. The automotive industry already contributes around 6% to India's GDP and nearly 35% of manufacturing GDP, making its future competitiveness central to the country's broader economic ambitions.

The challenge extends beyond availability alone. Every disruption in the supply of lithium, cobalt or rare earth elements affects production schedules, increases manufacturing costs and creates uncertainty for investors planning long term capacity expansion. For manufacturers operating in an intensely price sensitive market such as India, these fluctuations directly influence vehicle affordability and consumer adoption. 

A Linear Supply Chain Is Becoming India's Biggest Weakness 

India's EV industry largely follows a traditional linear model—extract, manufacture, use and discard. While this approach has supported industrial growth for decades, it is increasingly unsuited to a future where critical minerals are becoming strategic assets rather than abundant commodities.

Every electric vehicle battery contains valuable materials that retain significant economic value even after the battery reaches the end of its automotive life. Similarly, electric motors contain rare earth magnets that can be recovered and reused. Without efficient collection systems and recycling infrastructure, these materials are discarded, forcing manufacturers to depend on fresh imports despite already having valuable resources available within the domestic economy.

This is where the principles of a circular economy become increasingly important.

Closing the Materials Loop Is the Real Opportunity

A circular supply chain keeps products and materials in use for as long as possible through reuse, repair, refurbishment, remanufacturing and recycling. Rather than treating end-of-life batteries and components as waste, they become a valuable source of secondary raw materials that can enter manufacturing.

Battery recycling represents one of the most immediate opportunities. Modern recycling technologies can recover significant quantities of lithium, nickel, cobalt and other valuable metals from used batteries, reducing dependence on imported virgin materials while lowering the environmental footprint associated with mining.

The opportunity extends beyond batteries. Permanent magnets used in electric motors contain rare earth elements that are expensive, strategically important and increasingly difficult to secure. Recovering these materials through advanced recycling and urban mining can strengthen India's resource security while supporting domestic manufacturing.

Building the Ecosystem for Circular Mobility

However, material recovery cannot succeed without efficient reverse logistics. Policy will also play an equally important role.

India has already introduced Extended Producer Responsibility (EPR) provisions for batteries, but implementation will require continued strengthening through better collection mechanisms, improved traceability and stronger collaboration across the value chain. Digital tracking systems can improve transparency by monitoring critical materials from production through recycling, helping manufacturers recover valuable resources while assuring compliance with environmental standards.

Investment in domestic refining and recycling infrastructure should receive the same strategic attention as battery manufacturing. While gigafactories remain essential, the ability to recover and process materials domestically will determine how resilient India's EV ecosystem becomes over the coming decades. 

Circularity should also begin at the design stage. Vehicles and batteries designed for easier disassembly, repair and material recovery reduce recycling costs while improving resource efficiency. Design choices made today will determine how effectively valuable materials can be recovered years from now. 

A Competitiveness Strategy for India's EV Future

India's EV transition is often measured through vehicle sales, charging infrastructure and battery manufacturing capacity. While these remain important indicators, they capture only part of the story. The real test of long term success will be whether the country can secure the materials required to sustain this transition without remaining permanently dependent on volatile global supply chains. 

India has an opportunity to build an EV ecosystem that is not only cleaner but also smarter and more self reliant. Achieving that vision will require looking beyond vehicle production to the full lifecycle of the materials that power them. In the future of electric mobility, competitive advantage will belong not only to those who manufacture the most vehicles, but to those who recover, reuse and retain the resources that make those vehicles possible.

Bharath Krishna Rao is the CEO & Co-Founder at Emobi. All views expressed are the author's own.