Resource security that will help drive promotion and development of Low Carbon Technologies (LCT) is gaining rapid attention amongst advanced and emerging economies, particularly considering the Russia-Ukraine conflict and the resultant global energy crisis. Advanced economies have already started substantial work in this direction with the integration of resource security aspects and manufacturing policy planning. The United States maintains a strategic reserve for critical minerals to bolster its supply chain for energy-critical minerals used in LCT products and has more recently passed the Inflation Reduction Act which promotes high levels of localization of key low carbon technologies including Zero Emission Vehicles (ZEV). Likewise, Australia’s Critical Mineral Strategy complements resource security, modern manufacturing plans, and a technology investment roadmap. The European Union (EU) Raw Material Initiative binds together domestic priorities and external policies to ensure better access to critical raw materials for modern manufacturing. Recently, the EU and Canada have jointly announced a strategic alliance around critical mineral supply chains. It should also be noted that many countries including the US have included specific provisions in their critical minerals and low carbon technology development pathways that seek to diversify supply chains independent of China.
This creates a unique opportunity for India not only in the overall LCT space, but also particularly in the automobile sector. India being the 4th largest automotive manufacturer has the potential to emerge as a strategic player in key climate technologies including ZEVs if it can leverage and integrate its domestic capacities to match global requirements. Domestic assessment and production of key minerals necessary for LCT products is necessary, but India can simultaneously use its position within key multilateral forums to secure raw materials and long-term markets for its manufacturing goals.
The concept of an India-led Emerging Economies Collective aims to support and aid resource security aspects for India’s LCT product manufacturing pursuits. The Emerging Economies Collective (EEC) led by India is a strategic alliance of emerging economies in the global South which can position itself in global supply chains in the development and manufacturing of low carbon technologies.
As an example, through the EEC, India could secure critical mineral supply from a potential alliance country member, and in turn, export EVs to the member country. Thus, India continues to boost the competitiveness of domestic manufacturing, gains export market access in low carbon technologies providing economies of scale and enhance ZEV adoption within India, all of which contribute to its net zero goals. Meanwhile member countries also benefit by exporting critical materials and gaining finished products at an affordable price to facilitate their own low carbon transitions.
India has led several multilateral platforms (including COP) to champion the voice and concerns of developing countries. India is already known to be a global leader in clean energy given its rapid pace of renewable energy deployment in recent years and future ambitions. The Emerging Economies Collective will link both these issues helping achieve the country’s commitments at the global and national level.
- Help Indian industry acquire the right set of technologies and raw materials
- Restructure and rebuild traditional manufacturing practices
- Transfer India’s existing price competitiveness in manufacturing ICE vehicles to EV manufacturing
- Diversify and de-risk India’s supply chains creating a strong multiplier effect of PLI Schemes and related policy measures
- Create new economic opportunities in emerging clean technologies