Tucked among forested slopes and pristine valleys in a corner of northeastern India, young villagers have been busy knocking on doors – hoping to convince sceptical elders that graphite mining would bring much-needed jobs to their distant region.
“The youth in our village migrate to cities for work. What’s better than to have jobs near home?” Gollo Doni, a farmer and secretary of the local youth association, told Climate Home News as he and other members in their 20s discussed the latest meetings between locals and representatives of Oil India Limited (OIL), a state company exploring graphite and vanadium reserves in Arunachal Pradesh.
The mining plans in the state, which is home to more than one-third of India’s graphite reserves and the subject of a sovereignty dispute with China, reflect a push by the Indian government to position itself as a leading producer of battery-grade graphite as the mass rollout of batteries for electric vehicles (EVs) and power storage drives demand for the mineral.
An average electric car contains about 60 kg of graphite anode materials, according to the International Energy Agency, and the graphite supply chain is heavily dominated by China, which produces about 80% of the world’s natural graphite and controls more than 90% of global refining.
As Western countries seek to reduce their dependency on China, India’s reserves of graphite and other minerals vital for the switch to clean energy have caught governments’ attention, with Germany signing a critical minerals partnership agreement in January.
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Tucked among forested slopes and pristine valleys in a corner of northeastern India, young villagers have been busy knocking on doors – hoping to convince sceptical elders that graphite mining would bring much-needed jobs to their distant region.
“The youth in our village migrate to cities for work. What’s better than to have jobs near home?” Gollo Doni, a farmer and secretary of the local youth association, told Climate Home News as he and other members in their 20s discussed the latest meetings between locals and representatives of Oil India Limited (OIL), a state company exploring graphite and vanadium reserves in Arunachal Pradesh.
The mining plans in the state, which is home to more than one-third of India’s graphite reserves and the subject of a sovereignty dispute with China, reflect a push by the Indian government to position itself as a leading producer of battery-grade graphite as the mass rollout of batteries for electric vehicles (EVs) and power storage drives demand for the mineral.
An average electric car contains about 60 kg of graphite anode materials, according to the International Energy Agency, and the graphite supply chain is heavily dominated by China, which produces about 80% of the world’s natural graphite and controls more than 90% of global refining.
As Western countries seek to reduce their dependency on China, India’s reserves of graphite and other minerals vital for the switch to clean energy have caught governments’ attention, with Germany signing a critical minerals partnership agreement in January.
Ambitious plans
But hurdles remain to India’s ambitious plans to ramp up critical minerals output, both to position itself as an alternative to China and to meet its own fast-growing needs.
India has a target for 30% of new vehicle sales to be electric by 2030, and demand for EV lithium batteries looks set to surge close to 35-fold between 2023 and 2035, according to S&P Global Mobility, driven by growth in two- and three-wheelers in the country of 1.4 billion people.
Although domestic manufacturing of EV batteries is expanding, the sector remains at an early stage and India depends heavily on imports from China, South Korea and Japan.
At the same time, it wants to get graphite processing off the ground, aiming to turn its reserves of the mineral – which rank among the world’s 10 biggest – into higher value battery-grade supplies.
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With exploration already underway, the next step should be starting discussions about developing processing facilities – including support from foreign partners, said Kaira Rakheja, South Asia energy analyst at the Institute for Energy Economics and Financial Analysis (IEEFA).
“These exploration and extraction projects have a long gestation period. So even if discussions on processing start now, it will still take a while,” she said, noting India’s simultaneous push to create “rare earth corridors” encompassing every step of production.
Hurdles ahead
India’s graphite reserves are mainly of a lower grade, however, making processing for use in battery anodes more complex, while the country is a late entrant.
“We are not a big player in the market and have missed the bus,” said Aditya Ramji, director of the Global South Clean Transportation Centre at the University of California, Davis.
While exploration work is already underway at several sites in Arunachal Pradesh, and at some places in eastern and southern India, production will take at least two years to start, said Tana Tage, director at the Centre for the Earth Sciences and Himalayan Studies, OIL’s local partner and holder of a 10% stake in the Phop project.
A mine would create about 300 jobs and the project’s partners are discussing options for processing the site’s medium- to high-grade graphite locally, Tage added, despite voicing concern about a lack of technological know-how.
“India does not have the large-scale, advanced processing capabilities to achieve the ultra-high purity levels required for EV batteries and clean technologies,” he told Climate Home News.
Diversification drive
Despite such challenges, industry experts say India could benefit from the push to find sources of battery graphite other than China.
“We can’t beat China in this space, but we can still create a space for ourselves in buying and selling, as everyone is looking for a space to diversify,” said Rishabh Jain, fellow at the Council on Energy, Environment and Water, a New Delhi-based think-tank.
India’s government hopes the bilateral memorandum of understanding (MoU) signed with Germany could help.
As well as pledging cooperation on critical minerals exploration, the declaration envisions the exchange of know-how to add value through processing and recycling, facilitating investment and building the supply chain resilience of both countries. That could include identifying joint research projects and facilitating cooperation between industry players.
“India and Germany will work together to mutually strengthen supply chains in the field of critical minerals,” a spokesperson for the German government’s energy strategy said. “We will encourage companies to build strong ties in terms of knowledge sharing, offtake agreements and investments.”
Germany is already supporting several domestic projects focused on converting graphite into battery anode material – valuable experience that could potentially be shared with India, said Rakheja. In return for shared technical expertise, India offers a strong pool of workforce talent and a big market.
“This way, both partners can look beyond China,” she said.
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The MoU, which is non-binding, is “a good start”, said Svenja Schöneich, a senior advisor at the NGO Germanwatch, adding that it was thin on details, including on how to add value to India’s critical mineral resources.
“The partnership document should figure out the problem of local value creation. It should also consider that it can’t really skip processing through China,” Schöneich said.
An official at India’s Mining Ministry did not respond to requests for comment.
Trade deals and tax breaks
Beyond the five-year German accord, India has implemented numerous policy measures aimed at securing its own supplies of critical minerals and adding value to its mineral exports, for example by signing favourable trade deals. Last year, India’s graphite was granted zero-duty access to the US, just as the tariffs on Chinese graphite imports climbed to a high 160%.
When the government announced the national budget in February, it included a raft of financial measures aimed at kickstarting a plan to process minerals domestically – the details of which are expected to be announced in the coming months.
They included zero customs duty on critical mineral inputs and enhanced tax deductions for exploration, while the government’s production-linked incentive (PLI) scheme allocated the equivalent of $1.87 billion to build domestic battery cell manufacturing.
Before that can happen, progress on new mining – such as the Arunachal Pradesh graphite projects – is vital, Jain said.
“We are in 2026, and looking to move towards a cleaner world. This is the future,” he said.
The state government in Arunachal Pradesh agrees. It called last year for fast-tracked environmental permitting for graphite projects, new infrastructure around mine sites and reforms to avoid legal disputes that could hold the sector back.
Back in the village of Phop, youth association secretary Doni said that while reluctant residents did not raise an objection to OIL’s preliminary exploration licence, he fears a bigger fight ahead.
Tage said up to 3,000 people could ultimately be displaced if the project proceeds, raising questions about whether economic benefits would outweigh the social and environmental costs.
“It has been difficult to make the elders agree to actual mining,” Doni said, as he and other young villagers sipped on sweet tea in a thatched mountain house. “We are trying to convince our elders that mining will not only bring resources for the nation, but bring us jobs here.”