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.
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.
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)
