Graphite: The Hidden Driver of India’s Li-ion Battery Revolution

As India accelerates toward its net-zero emissions target by 2070, lithium-ion batteries (LIBs) have taken centre stage in the clean energy transition. While significant attention is given to lithium, cobalt, and nickel, graphite is a silent workhorse powering these batteries. This meek mineral, often overlooked in the green energy discourse, is the backbone of LIB anodes, making up nearly 50% of a battery’s composition. Yet, India’s heavy reliance on imported graphite exposes a critical vulnerability in its energy security strategy.

Graphite is used as an anode in LIBs due to its high conductivity and it provides stability in LIBs. China dominates the graphite supply chain, controlling 77% of global production, according to the US Geological Survey. Recent Chinese export restrictions on graphite have sent shockwaves through international markets, raising alarms about supply chain disruptions.  For domestic battery manufacturers and EV producers who currently import a higher amount of their graphite needs from China, this development should serve as a blaring alarm. The timing couldn’t be worse. As India races to create itself as a global EV hub with determined production targets, the graphite squeeze threatens to derail cost competitiveness, disrupt manufacturing timelines, force suboptimal alternatives, and expose geopolitical risks.

For Indian industry players, the writing is on the wall “The era of easy access to cheap Chinese graphite is ending”. The countries that don’t rapidly diversify their supply chains risk being left behind in the country’s electrification race. The dilemma isn’t whether to act, but how expeditiously and strategically they can respond to this new reality.

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While countries like Madagascar, Mozambique, and Brazil also hold significant reserves, China’s stranglehold on refining and processing leaves little room for easy alternatives. Over the past year, the value of natural graphite has risen sharply, as demand continues to surpass supply. The market value of graphite worldwide is projected to increase significantly from $23.73 billion in 2022 to $37.68 billion in 2028, according to the data available on Statista.  In India, the National Critical Minerals Mission (NCMM) aims to reduce the dependency of critical minerals on other countries, but progress has been slow. This delay risks hindering India’s ambitious clean energy and advanced manufacturing goals, which rely heavily on secure mineral supplies.

As per research articles, 44-66 kg of graphite is required in NMC and LFP batteries, compared to just 6 kg of lithium in a typical 60 kWh car battery. Recycling is a viable, albeit underutilized, solution for extracting these critical minerals from end-of-life batteries.

Currently, recycling graphite is costly and technically challenging within the country. It must be purified and reshaped to prevent battery short circuits. But with global graphite demand projected to increase 25-fold by 2040 stated by the International Energy Agency (IEA), India cannot afford to ignore this critical scenario. A circular economy approach, where spent batteries are systematically recycled, could mitigate supply risks and reduce import dependency.

India’s EV revolution is growing for the unprecedented demand for graphite, with annual requirements projected to rise steeply from negligible levels in 2022 to a staggering ~100,000 metric tons by 2030, according to NITI Aayog’s report. The graph shows projected graphite demand (in metric tons) by vehicle type, with a total graphite demand of 3,49,617 MT till 2022-2030.

Demand Projection of Graphite by 2022-30. Source: NITI Aayog

The World Bank estimates that 4.5 million tonnes of graphite will be needed annually by 2050, a 500% surge from 2018 levels. To secure its energy future and mitigate supply chain vulnerabilities, India must pursue a multi-pronged strategy that leverages its natural resources while embracing technological innovation and global cooperation. First and foremost, the country must urgently fast-track the development of its domestic graphite reserves, which account for a notable amount of global deposits but remain largely untapped due to bureaucratic hurdles and underinvestment. Simultaneously, India needs to channel investments into advanced purification and processing technologies that can transform recycled graphite from spent batteries into high-grade material, making the circular economy model commercially sustainable. This threefold approach of harnessing domestic reserves, revolutionizing recycling capabilities, and cultivating reliable global alliances will not only address immediate supply concerns but also position India as a more self-reliant player in the global battery value chain.

India also holds domestic graphite players such as Epsilon, Tata Chemicals, Graphite India, and Hindustan Zinc, while partnerships like the Mineral Resources Development Corporation (MRDC) and the EU’s Graphene Flagship signal growing technological collaboration. Nevertheless, substantial hurdles persist in scaling the domestic mineral industry to meet near-term demand for this critical resource.

Graphite may not have the glamour of lithium, but its role in India’s energy transition is irreplaceable. Without a strategic push for self-sufficiency, the country risks being at the mercy of volatile global markets. The window for intervention is closing; proactive measures must precede a full-scale supply crisis undermining industrial and climate goals.

(Views expressed are the authors’ own and do not reflect those of ICRIER)

Decarbonizing India’s Aluminium Sector: Challenges, Pathways, and Policy Gaps

Over the years, industrial decarbonization in India has witnessed gradual progress; however, several bottlenecks continue to slow the pace and depth of transition. Key barriers include the sector’s heavy reliance on coal-based captive power plants, the high costs associated with shifting to renewable energy, and the adoption of new energy-efficient technologies. The aluminium sector has been a significant contributor to India’s economic growth, accounting for nearly 5.5% of global aluminium production. Despite this, it remains one of the most energy-intensive industries, alongside iron and steel, cement, etc. In 2023, India’s aluminium sector contributed approximately 8% of total greenhouse gas emissions, largely due to its energy-intensive production processes. Aluminium production involves two major stages, alumina refining and aluminium smelting with the smelting process requiring a continuous and uninterrupted power supply. Producing one tonne of aluminium typically requires around 70 to 80 GJ of energy, making reductions in energy intensity critical for decarbonizing the sector. At the same time, aluminium production in India has expanded significantly to meet rising demand from sectors such as automotive, aerospace, packaging, and electrical applications. This growth further underscores the need for strategic and timely carbon abatement measures. Adding to this urgency, emerging trade measures such as the Carbon Border Adjustment Mechanism (CBAM) are expected to increase the risk to the global competitiveness of India’s aluminium exports. In this context, decarbonizing the aluminium sector is no longer a peripheral sustainability concern but a core industrial and trade strategy issue.

From the previous and past experiences, it has been observed that the most impactful pathway for decarbonising India’s aluminium industry lies in transitioning to low-carbon electricity. Renewable energy integration, particularly wind and solar, offers significant abatement potential, given that electricity consumption accounts for the bulk of sectoral emissions. However, the uninterrupted power requirement of aluminium smelting poses challenges for large-scale renewable adoption. Hybrid renewable systems combined with battery storage and grid-balancing mechanisms are emerging as partial solutions, although they entail higher capital and operational costs. While several producers have begun investing in captive renewable capacity and long-term power purchase agreements, scaling these solutions across the sector will require substantial grid upgrades and stronger regulatory support.

In parallel, improvements in energy efficiency have played an important role in reducing emissions. The adoption of energy-efficient technologies, such as electric extrusion melting, copper-inserted collectors in potlines, and magnetic compensation loops, holds considerable potential to lower the energy intensity of aluminium smelting processes. Another underutilised decarbonization lever is aluminium recycling. Secondary aluminium production consumes only a fraction of the energy required for primary production and can significantly reduce emissions intensity. However, India’s aluminium recycling ecosystem is largely dominated by informal players, leading to challenges such as inconsistent quality and limited adoption of advanced technologies. A more formalised and scaled recycling system, supported by policy incentives and extended producer responsibility frameworks, could substantially reduce demand for carbon-intensive primary aluminium.

Despite the availability of multiple decarbonization pathways, progress remains constrained by structural and policy gaps. One of the most significant missing links is the absence of a clear, sector-specific decarbonization roadmap. India currently lacks binding emissions benchmarks, green product standards, and differentiated incentives for low-carbon aluminium. Financing constraints further complicate the transition, as estimates suggest that achieving net-zero aluminium production would require tens of billions of dollars in additional capital expenditure. These investments are likely to raise production costs in the near to medium term, posing competitiveness challenges, particularly in price-sensitive domestic markets. In the absence of carbon pricing, green public procurement, or demand-side incentives, producers have limited avenues to recover these costs. Grid infrastructure and energy system readiness also remain critical bottlenecks. Parallel investments in transmission and energy storage are essential to support large-scale integration of renewable energy and reduce dependence on fossil-based backup power.

Analytically, decarbonising India’s aluminium industry requires coordinated action across energy policy, industrial policy, and finance. Without such alignment, the sector risks losing its competitive edge relative to global markets. Renewable electricity, efficiency improvements, recycling, and emerging technologies together can lead to significant emissions reductions, but only when supported by coherent policy frameworks, targeted financial instruments, and enabling infrastructure. Decarbonization should therefore be viewed not as a constraint on growth, but as a strategic investment in the long-term viability of India’s aluminium industry. The real challenge lies not in the absence of solutions, but in bridging the policy, financing, and coordination gaps between ambition and implementation.

(Views expressed are the authors’ own and don’t necessarily reflect those of ICRIER)

Circular Fashion in India: Why Sustainability Still Comes at a Premium

India sits at the heart of the global textile economy. From cotton farms in Maharashtra to spinning mills in Tamil Nadu and garment factories supplying brands across Europe and the United States, the country is both a manufacturing powerhouse and a fast-growing consumer market. Yet India is also staring at a mounting textile waste problem, one that our current linear model of “make, wear, discard” is ill-equipped to handle.

In theory, circularity promises a textile system where clothes last longer, are reused and repaired, and eventually recycled back into new fibres. However, in practice, India’s journey towards circular textiles reveals a hard truth: sustainable choices still cost more, and the burden of that premium is unevenly shared.

Design first, recycling later

If circular fashion has one clear lesson, it is that recycling cannot fix bad design. Too many garments today are made with complex fibre blends, cheap trims and chemical finishes that make reuse and recycling nearly impossible. For India, where the textile and apparel sector contributes about 2.3% of India’s GDP, this matters enormously.

Designing clothes that last longer and can be easily repaired or recycled is not just an environmental issue, it is an industrial strategy. Better design reduces waste, lowers material losses and creates products with higher long-term value. Yet design decisions are often driven by international buyers demanding low prices and rapid turnaround times, leaving little room for durability or recyclability. If India is serious about circularity, design standards must move up the agenda, not only for exports but also for the domestic market, where fast fashion consumption is rising rapidly.

Ironically, some of the most circular practices already exist in India. Repairing clothes, passing them on, or repurposing old textiles has long been embedded in everyday life. Tailors, repair shops, and informal resale markets together form a vast, decentralised circular economy that operates with minimal waste and maximum value retention. The LiFE (Lifestyle for Environment) Mission seeks to institutionalise and scale these practices by promoting conscious consumption, reuse, and resource efficiency as national priorities. By aligning traditional circular behaviours with LiFE’s behavioural-change framework, India has a unique opportunity to bridge informal ingenuity with formal policy, strengthening circularity while preserving livelihoods and reducing the environmental footprint of the textile sector.

Yet these systems are rarely recognised or supported in formal policy or brand strategies. Instead of building on this advantage, India risks replacing it with a Western-style disposable fashion culture. Strengthening repair services, resale platforms, and quality standards could extend garment life at far lower cost and environmental impact than most recycling technologies.

The missing backbone: collection and sorting

Where India struggles most is in what happens after clothes are discarded. Collection systems for post-consumer textiles are fragmented, informal and poorly documented. Valuable material is often mixed, damaged or exported without traceability.

Advanced recycling technologies, particularly chemical recycling, demand clean, well-sorted feedstock. Without investment in collection, sorting and traceability infrastructure, these technologies cannot scale. Digital product tags and automated sorting facilities are often discussed, but deployment remains limited. This gap explains why India, despite its manufacturing scale, risks being locked out of higher-value recycling pathways unless public and private investment accelerates.

Perhaps the most difficult issue for India’s textile sector is this: recycled fibres often cost more than virgin materials. Mechanical recycling produces lower-quality fibres that are suitable only for limited applications. Chemical recycling can produce near-virgin quality polyester or cellulosics, but it is capital-intensive, energy-hungry and still developing[1]. According to a news article published in the Times of India, in major cities of Indian, like Hyderabad, 750–800 tonnes of discarded clothing are collected daily, but about 40% of this could theoretically be recycled; without proper segregation, most ends up in landfills.

As a result, recycled textiles frequently carry a price premium. Brands may promote sustainability in marketing campaigns, but many remain reluctant to absorb higher material costs. The burden often shifts to suppliers, who already operate on thin margins, or to consumers, who may not be willing to pay more. For a price-sensitive market such as India, this creates a real dilemma. If circular textiles remain a premium product, circularity risks becoming a niche rather than a systemic solution.

This is where government intervention becomes critical. Expecting the market alone to deliver affordable circular textiles is unrealistic. Policies such as extended producer responsibility, minimum recycled-content mandates and green public procurement can help create stable demand and reduce price volatility. According to IMARC Groups, the textile recycling market in India was valued at around USD 328 million in 2024 and is projected to grow, reaching approximately USD 427 million by 2033 as sustainable practices gain traction.

India’s waste management rules serve as a starting point, but recent discussions by the Ministry of Textiles on ESG in textiles underscore the importance of enforcement and clarity. Without strong ESG-aligned policy signals, investments in recycling remain risky and recycled fibres struggle against cheaper virgin alternatives. There is also a growing concern about confusing activity with impact, not all recycling is environmentally beneficial if it is energy-intensive or chemically hazardous. Embedding life-cycle assessment within ESG frameworks is essential to ensure circular solutions genuinely reduce emissions, water use, and pollution rather than shifting impacts elsewhere.

This matters particularly for India, where environmental burdens and social costs are often borne by vulnerable communities. Circularity cannot succeed if it ignores labour conditions in recycling chains or displaces informal workers without alternatives.

A pragmatic path forward

India does not need to leap straight into high-tech solutions. The most effective pathway is a layered one. Start with better design, strengthen reuse and repair, build robust collection systems, and deploy recycling technologies where they make economic and environmental sense.

Above all, India must confront the pricing question head-on. Circular textiles will not scale if recycled fibres remain a luxury. Closing that gap requires coordinated action from brands, policymakers and investors, and a willingness to accept that sustainability, at least initially, costs money.

The real question is not whether India can afford circular textiles; it is whether it can afford the long-term costs of staying linear?

(Views expressed are the author’s own and do not reflect those of ICRIER)

[1] Juanga-Labayen, J. P., Labayen, I. V., & Yuan, Q. (2022). A Review on Textile Recycling Practices and Challenges. Textiles, 2(1), 174-188. https://doi.org/10.3390/textiles2010010

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Sub-National Disaster Finance: Missed Opportunities and Challenges

Two thousand villages uprooted, 43 lives lost, and thousands of people displaced in Punjab in recent floods is not an anomaly, but a recurrent catastrophe. Recent years have been marked by a cascade of climate hazards, revealing a nationwide pattern of escalating climate risks and mounting damages. The statistics reveal a glaring reality: human proclivities and the pursuit of high growth have left the planet vulnerable, altering the planet’s radiative forcing and straining its natural resources. This has exacerbated the intensity, severity, and frequency of natural hazards, resulting in socio-economic damages and losses. Keeping in line with the dynamic characteristics of climate change, the 15th Finance Commission’s disaster finance recommendations provide a systematic suite of guidelines to mitigate and recover from the climate change-induced disasters.

The report astonishingly diverges from its successive commissions by introducing a new methodology to allocate disaster funds based on a state’s capacity, risk exposure, and vulnerability. The commission has also suggested maintaining mitigation funds aimed at avoiding losses and damages both at the national and state levels, along with response funds, to support preparedness, mitigation, and recovery efforts. Mitigation, within the scope of the document, has been referred to as all the measures taken to avoid the damages before the disaster, differing from its conventional and broader meaning in mainstream climate discourse. Additionally, it has also proposed exploring market-based risk management tools and alternative funding sources to strengthen disaster financing.

This marks a tremendous shift from previous reports and covers a broad spectrum of climate risks and associated relief measures, supporting the concerted efforts to acknowledge the loss and damages emanating from climate risks. However, it still continues to prioritise post-disaster relief over pre-disaster resilience. For instance, from the corpus dedicated to disaster management at both the state and national level, 20% has been earmarked for avoiding damages, while the rest has been allocated to the response fund comprising response and relief, recovery and reconstruction, and capacity building funds. This highlights that India is still stuck in a “pay after damage” model rather than a “prevention is better than cure” model. The uncertainty of disasters and the quantum of damages they leave in their wake, preventive measures such as climate proofing existing infrastructure, establishing monitoring and warning systems, and deploying climate resilient technologies are not mere fancy environmental luxuries, but essential safeguards. However, these measures require huge upfront costs, making the current allocation grossly inadequate.

Despite Section 2 (i) of the Disaster Management Act defining mitigation practices involving developing coastal walls, flood embankments, etc, the role of nature-based solutions still remains grossly under-invested. The recommendations call for allocating funds to support the relocation of affected communities located in floodplains, coasts, and hills. While suggested in good faith, this overlooks the sizeable financial commitments involved to build resettlements, in conjunction with it being socially disruptive. In contrast, the Finance Commission argues that these projects should not be funded from the mitigation fund. Whereas, a forward-looking plan should argue and include the costs within the mitigation funds to finance these projects, if not fully then partially, that reduce the damages significantly, instead of making relocation a default action and leaving the state government to cut expenses from its regular budgets to make the deployment of these projects economically viable.

In addition, the report recommends expanding the state-specific allocation to 25% from 10%. This could have been done with the view that damages like landslides, floods, and heatwaves are largely local in nature and need certain flexibility from the state government to address them. However, the increase in allocation may not be fiscally prudent and may put immense pressure on public budgets without the scope for diversifying funding sources. Given damages induced from climate change form public goods, this leaves primarily the state with a huge responsibility to mitigate it, supported by the central government whenever necessary. There is a need to mobilise funds from sources other than public streams, such as blended finance, bonds, risk pools, catastrophe (CAT) bonds, parametric insurance and corporate investments, to increase private players’ participation. After all, the aftermaths of climate change do not discriminate and affect everyone.

In this vein, the recommendations also touch upon making insurance available to raise funds, recognising the rapid growth of the sector and the pivotal role that it can play to ease fiscal burden. The recommendation expands on including four broad facets, such as disaster-related death insurance, crop insurance, a national risk pool for protecting and restoring infrastructure, and international parametric insurance. However, this recognition is in stark contrast to the reality. Most households and businesses have minimal to no coverage against climate-related losses. The report merely lays down the role that insurance can play without building a foundational mechanism to expand coverage, such as a premium support and risk-sharing framework to make the tool operational, missing a critical opportunity. Despite meaningful deliberations on this aspect, without concrete guidelines, the government will continue to shoulder compensation costs post each disaster.

Photo by Ravi Roshan on Pexels.com

The shift in the 2020-21 report to a more balanced methodology, including mixing fiscal capacity, risk exposure, and disaster risk index, is a welcome and strategic correction. Moreover, its continuation for 2021-26 reflects a much-needed acknowledgement that climate vulnerability, not historical expenditures, should drive the allocations of the funds. By incorporating risk exposure and disaster risk, the Commission lays a foundation for a more equitable and needs-responsive financing and allocation system. Incorporating these elements to determine climate vulnerability is essential for understanding future risks and informing studies that employ downscale climate data to identify and estimate parameters that shape how climate hazards manifest and impact the local economies. Deliberations on instruments such as insurance to share risks and expand financial resources are both proactive and practical.

Increasing the share of state-specific allocations and calling for exploring market-based instruments is also welcomed as an aspirational move. However, in an era of intensifying climate change that will repeatedly lead to severe losses, incremental improvements are not enough. There is an urgent need for a proactive, forward-looking disaster finance system that prioritises reducing risks before the disaster strikes.

(Views expressed are the author’s own and do not reflect those of ICRIER)

Climate Resilience in India: Why Community Leadership Matters

In the present landscape of climate change, the intersection between climate resilience and economic sustainability has become a crucial focus for community-building initiatives. While actions by the government remain essential for large-scale support and development, community practices are arguably more important in building real resilience for several reasons. Local communities stand on the front lines of climate impacts. They possess indigenous knowledge shaped by their unique environmental conditions, allowing them to develop solutions that are practical, affordable, and deeply rooted in local needs. As India advances its adaptation efforts, community-centric approaches have emerged as one of the central pillars because their actions are grounded in local realities. What becomes increasingly clear is that strong climate resilience in India depends on recognizing communities as key partners in planning and implementation. When people at the grassroots are provided with the right information, tools, and support systems, they can build solutions that are not only environmentally sound but also socially and economically meaningful. Strengthening local participation, improving access to technical knowledge, and encouraging collaboration across villages and districts can make climate action far more effective and long-lasting.

Across India, communities are already facing the ripple effects of climate-induced catastrophes, cyclones, floods, droughts, and extreme heat, which severely affect agriculture-dependent and resource-scarce regions. These local communities are usually the first to experience these impacts and the first to respond. For millions of marginalized households, these shocks translate into crop losses, unstable incomes, food insecurity, and migration. This makes climate-resilient agriculture a necessity rather than a choice. Many communities have started adopting diversified cropping systems, improving soil health through organic inputs, restoring traditional seed varieties, and integrating water-efficient practices such as drip irrigation and rainwater harvesting. Furthermore, to mitigate crop damage from recurring cyclones and subsequent saline inundation, farmers in Odisha’s coastal areas are able to revive saline-resistant paddy seeds to cope with the issue. This has been achieved by the collaborative efforts made by the local farmer initiatives and scientific support. Alongside, in Maharashtra’s Marathwada region, local watershed groups have revived rivers, streams, and village tanks through collective labor, improving groundwater recharge and strengthening agricultural productivity. These types of practical interventions have been demonstrating the efficiency of merging local expertise with tangible actions.

Furthermore, a notable example of community innovation in the agricultural sector is the growing adoption of village-level biogas plants. Many villages in Haryana, Karnataka, and Gujarat have set up community biogas units that use cattle dung and agricultural waste to produce clean cooking fuel. The nutrient-rich slurry that remains after gas production serves as an excellent organic fertilizer, reducing dependence on chemical inputs and helping restore soil health as well as water retention. This, in turn, making agriculture more resilient to climate change impacts like drought. These biogas initiatives illustrate how rural communities can build climate resilience while strengthening local economies. In parallel, community-led disaster preparedness also highlights the strength of local participation. In coastal and flood-prone regions, trained village volunteers and local committees play a crucial role in early warning communication, evacuation support, and relief coordination. Odisha’s cyclone-prone districts offer strong examples, where community groups work alongside disaster response teams to ensure timely preparation. In Assam, village flood committees monitor river levels during the monsoon and help families secure essentials before water rises. These systems rely heavily on trust and collective responsibility qualities that are easier to build at the community level than through external structures alone. However, in India, there are several top-down planning structures ranging from national (National Action Plan on Climate Change (NAPCC), other national schemes on agriculture, water, disaster management, etc.) and state climate policies to departmental schemes which are designed using broad datasets and uniform guidelines which often overlook insights and lived experiences of local communities. Summing up, the community-led initiatives taken across different sectors to build climate resilience clearly demonstrate their pivotal role. There is a fundamental need to bridge the gap between local, grassroots efforts and formal, top-down policy and planning structures.

As India advances on its path toward stronger climate resilience, creating an enabling environment where local voices, knowledge systems, and community priorities on-ground action becomes necessary. Climate impacts are deeply context-specific drought patterns in Bundelkhand differ from flood vulnerabilities in Assam or coastal risks in Odisha, hence solutions must be anchored in local realities. Community-led initiatives offer this granularity. They can identify emerging risks early, mobilize people rapidly, and design context-driven responses that top-down planning structures often overlook. However, to scale-up these efforts consciously, there is a need for supportive institutional frameworks and recognition within formal planning processes. Strengthening communities through long-term capacity-building, training programmes, awareness initiatives, and access to technical guidance can significantly enhance adaptation outcomes. Local groups often provide the first signals of climate shifts changes in crop behavior, water availability, or seasonal unpredictability which can help refine larger climate strategies.

National and state policies must therefore create pathways that formally integrate community-generated insights into district and state climate plans. Clear processes for incorporating community climate action plans, participatory vulnerability assessments, and locally developed adaptation practices can help bridge the gap between ground realities and institutional decision-making. Additionally, structured platforms for knowledge exchange across villages, districts, and states can help replicate successful grassroots models such as community-driven watershed management, local biodiversity restoration, or village committees managing bio-gas plants for cleaner energy in agriculture.

(Views expressed are the authors’ own and don’t necessarily reflect those of ICRIER)