Why Is India Struggling to Find Space in the Global EV Trade?

Electric vehicles are reshaping the global automobile sector. In India, despite a giant domestic market, the country remains a marginal player in the global EV trade. Other regions, such as Asia, Europe, and North America, are scaling up exports of electric vehicles (EVs). Moreover, India is still seeking a considerable position in the highly competitive EV sector and tech-driven market across the globe. 

Domestic EV Market Growing, But Not at Global Pace

The alert comes at a time when the global electric vehicle industry is experiencing rapid growth. Globally, importations of electric vehicles increased dramatically from $4.6 billion to almost 150 billion between 2020 and 2024, driven by stringent climate control measures and a decline in the use of combustion engines.

India, however, is still a minor notifier in this sector. The actual export of EVs in India increased to $84 million in 2024 compared to only $1.2 million in 2020; however, it accounts for only around 0.1 percent of worldwide EV exports. The import in 2024 amounted to $211 million. Hence, it caused a trade deficit of $170.5 million in this part.

Battery Technology: The Core Weakness

India is dependent on imported battery manufacturing equipment and cutting-edge technology. This immediately affects its future position in the worldwide electric vehicles market, the report added. According to NITI Aayog, the essence of the problem is the lack of local manufacturing in India. Although the local industry can assemble batteries, the country sources batteries, manufacturing equipment, and technology from overseas.

Missing the High-Value Technology Layer

Currently, the export of electric vehicles is small-scale and low-cost, and has been led mainly by neighbouring nations. Even the Nepali market alone accounted for around 46 per cent of India's electric vehicle exports as of 2024, and other markets such as Indonesia and Japan have been newly added to the list of exports in recent times.

On the contrary, EV imports from India rank highly in the premium segment, and state-of-the-art components come from nations such as Germany and China.

Policy Push Hurdles Remain

Government initiatives such as production-linked incentives have encouraged investment, yet high entry thresholds and strict localisation norms pose challenges for smaller manufacturers and startups. While these policies aim to strengthen domestic manufacturing, they have yet to translate into a broad-based export surge.

Export Mix Misalignment

Two-wheelers and cheap vehicles remain leaders in India's automotive exports; these products have negligible influence in international EV trade; later is driven by passenger cars, commercial EVs, and parts. India's commercial presence in world markets is constrained by a mismatch between export products and international demand.

The Road Ahead

The focus has to move from mere size to competence-building for India to emerge in the global EV commerce segment. The objectives for this would be to work on battery ecosystem development, enhance component production, focus on technological collaborations, and align incentives with export viability. If this is not done, India would be left with just being a huge consumer of EVs and not a supplier.

Final Thoughts

EV challenge in India is not about goal, but execution. Filling technology gap and building depth across the EV value chain will determine whether India becomes a global challenges or stays on the sidelines of the EV revolution.