• India has signed a Memorandum of Understanding (MoU) with Bolivia for development and industrial use of lithium—a prime component used in batteries for electric vehicles.
• This partnership will make Bolivia one of the major providers of lithium for India’s e-mobility and e-storage needs.
• The two countries have also agreed to facilitate mechanisms for the commercialization of lithium carbonate and potassium chloride produced in Bolivia by Yacimientos de Litio Bolivianos Corporación (YLB – Corporación).

Analysis:

• Bolivia is estimated to hold over 60% of the world’s reserves for lithium but has not yet started producing it commercially. As per the US Geological Survey, salt flats in the highlands of the Salar de Uyuni alone contain nine million tonnes of lithium—over a quarter of the world’s known deposits.
• India looks to set up large lithium-ion battery plants, the Lithium Triangle countries in South America (comprising Chile, Argentina and Bolivia) have offered to meet India’s growing demand for lithium.
• India is the second largest manufacturer of mobile phones in the world and has the ambitious goal of 30 per cent electric vehicles by 2030. But India imports all its lithium-ion batteries since India has no known sources of lithium, and zero lithium-ion battery manufacturing capabilities currently. As a result, India is heavily dependent on China, Taiwan and Japan for import, especially of batteries required for portable electronics.
• With this agreement, number of Indian companies setting up production capabilities in Bolivia goes up, as well as the import of lithium to India.
• Domestic production is also set to see a boost, from the automotive perspective. Further, the arrival of hybrids and electric vehicles from as early as 2020 onwards, will force manufacturers to look at local production.
• This agreement could also turn out to be the backbone for the recently launched FAME India policy (Faster Adoption and Manufacture of (Hybrid and) Electric Vehicles) and will also give a substantial push to India’s ambition to have at least 30 per cent of its vehicles run on electric batteries by 2030.