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Local sourcing requirements in India’s EV sector: Building a domestic supply chain
- A local and reliable supply chain is required for the production and distribution of EVs in India, as EV manufacturers rely heavily on imports for EV components such as batteries, motors, and electronics.
- Localising the production of these components poses challenges due to the complex nature of components/assemblies and substantial investments required for in-house production.
- Dependence on imports not only affects the cost of EVs but also leaves the supply chain vulnerable to disruptions, making having a reliable local source of components and raw materials imperative for EV manufacturers.
- The Indian government's recent policy aims to encourage global manufacturers to establish manufacturing facilities in India to promote it as a hub for EV production, with a target of 50% localisation within five years.
- A domestic supply chain would ensure steady and uninterrupted supply of components for EV manufacturers, allowing for better quality control and overall cost savings.
- Domestic production is set to spur innovation and technological advancements within the country, generating multiple employment opportunities for skilled workers, technicians, engineers, and researchers.
- The success of localisation efforts requires collaborative efforts from industry players, along with investing in skill development programs and R&D initiatives to nurture local talent.
- This shift towards domestic production in the EV sector would allow local EV players to collaborate with global manufacturers to develop customised components tailored to the specific needs of the Indian market.
- Innovation would emerge as a pivotal driver in the EV landscape, ushering in new manufacturing processes and improved technologies.
- This could bolster the competitive edge of the Indian EV industry on a global scale, strengthening its position in the market.
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