NEW DELHI: A study by IIM Bangalore and the International Council on Clean Transportation (ICCT) reveals that India's transition to electric vehicles could support 7.2 million direct manufacturing jobs by 2040, if the country builds its own battery cells.
According to the study ‘Employment implications of vehicle electrification under alternative fuel efficiency pathways in India’, which examined different transition scenarios, recommended that India can generate more jobs than it lost during the transition from ICE to EV batteries if the target is aligned with Viksit Bharat.
It says the net job impact is positive beyond a certain level of battery localisation. It also adds that if India achieves at least 30% battery localisation by 2032 and 50% by 2040, it would create an opportunity to create 7.2 million direct manufacturing jobs.
An estimate suggests that India will lose around 60% of ICE-related manufacturing jobs during the transition, particularly in engine and transmission production.
At that level, India could produce at least 30% of the batteries it needs domestically by 2032, regardless of which of the three EV growth scenarios in the study actually takes place.
Right now, India can produce only about 1.4 GWh (gigawatt-hours) of battery cells. This is less than 3% of the batteries India is expected to need by 2032.
Meanwhile, India has many new battery factories planned or under development. These include projects supported by the government's PLI scheme for Advanced Chemistry Cell (ACC) batteries.
If all these planned projects are completed, India's battery-cell production capacity could rise to around 128 GWh.
Battery manufacturing in India is the most important part of the EV industry if India wants to create more jobs and retain more economic value within the country.