India’s R&D Spending Gap Forces Reliance on Chinese Technology
India’s limited research and development investment is creating technological dependence on strategic rival China, particularly in the critical electric vehicle sector, according to steel billionaire Sajjan Jindal. The JSW Group chairman revealed his company is negotiating with multiple Chinese manufacturers to acquire EV technology necessary for launching an Indian electric vehicle brand by mid-2025.
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“The technology rests in China. Even Europe is taking the technology from China,” Jindal stated in a Financial Times interview. “China has taken a huge leap versus the European auto companies, so we don’t have any option.” Analysts suggest this technological gap stems from India spending just 0.66% of GDP on research and development, compared to China’s 2.4% and America’s 3.5%.
Geopolitical Tensions Complicate Technology Transfer
The report states that India’s reliance on Chinese technology faced significant disruption in 2020 when border conflicts prompted Beijing to restrict technology sharing. New Delhi responded with increased scrutiny of Chinese investments, visa denials, and blocked manufacturing partnerships, including with BYD.
Despite recent diplomatic efforts, including Prime Minister Narendra Modi’s first China visit since 2019 this August, sources indicate India remains cautious about Chinese technology and investment. This caution exists alongside India’s attempt to attract supply chain diversification away from China, creating a complex technological landscape for JSW Group and other Indian manufacturers navigating industry developments.
Joint Venture Challenges Highlight Technology Control Issues
JSW’s current electric vehicle production occurs through a joint venture with Chinese state-owned SAIC Motor, manufacturing MG Motor-branded cars. However, Jindal reportedly stated SAIC wants to reduce its stake while being “reluctant” to inject additional capital.
“I told the [SAIC] chairman we want to own a 100 per cent stake in a new venture where we will do a lot of innovation ourselves,” Jindal revealed, contrasting with SAIC’s preference for developing technology in China before Indian production. This tension reflects broader market trends in technology transfer agreements.
Battery Production Remains Critical Hurdle
Batteries represent one of the most significant challenges in India’s EV ambitions, according to the analysis. India primarily imports battery cells from China, Japan, and South Korea, with domestic production projected to meet just 13% of the country’s EV battery demand by 2030, according to S&P Global Mobility data.
This supply gap creates ongoing dependence despite Jindal’s stated goal to “manufacture, design and develop the technology in India.” The situation has escalated to the WTO, where China recently challenged India’s EV and battery subsidies, claiming they create unfair competition, highlighting how recent technology disputes are playing out on the global stage.
Business Pragmatism Versus Strategic Independence
Jindal expressed optimism that India-China relations would continue improving, particularly noting risks in trade relationships with the United States. “Either bullets will talk or business will talk,” he commented on bilateral relations. “Both cannot talk simultaneously.”
The steel magnate acknowledged Indian companies, including his diversified steel-focused conglomerate, aren’t investing sufficiently in R&D due to capacity-building priorities. While the government offers manufacturing incentives, Jindal described the support as “shoestring budgets” insufficient for technological independence, even as related innovations in other sectors demonstrate what sufficient research investment can achieve.
JSW Group reported $23 billion revenue in the fiscal year ending March 2025, with steel accounting for $19 billion. The privately-held EV joint venture recorded under $1 billion revenue in the previous fiscal year, while JSW Steel’s recent quarterly profits surged nearly fourfold to $185 million, according to financial reports.
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