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This is the fourth and final part of a series focusing on why India faced gas and oil shortages almost immediately as the US-Israel war on Iran began, leading to the closure of the Strait of Hormuz. Read part one here, part two here, and part three here. 

Between March and July 2022, India’s Ministry of Heavy Industries was briefly ecstatic.

In October 2021, it had unveiled its PLI (Production-Linked Incentive) scheme for developing rechargeable batteries in India. It was a moment laced with potential. Between rising EV sales and India’s transmission grid needing to store surplus power, India’s need for advanced chemical cell (ACC) batteries was rising. 

Indigenously-developed batteries would not only reduce India’s dependence on China, they could help India become a global supplier of these batteries. 

Commenting on the scheme, Mahendra Nath Pandey, the Union cabinet minister for heavy industries at the time, said as much. “Today big companies are investing in electric vehicle manufacturing in India and are interested to join us,” says a PIB release quoting him. 

“We should give them more encouragement and keep trying to make India a manufacturing hub.”

For that to happen, though, a lot hinged on the government. While developing the PLI scheme, the Modi government had junked India’s previous industrial policy and embraced a new approach of “national champions”. In each sector, as South Korea did with the chaebols, it wanted to groom no more than three or four firms. Between the scale of India’s market and lowered market fragmentation, it said, these firms would find it easier to grow into a world-beating scale.

The claim seemed debatable. Over the last two decades, the supply chain for renewable equipment (like solar panels and batteries) has evolved into a form where global manufacturers have come to focus on one or two steps in the manufacturing process (polysilicon, ingot, wafer, cell and solar panel), amassing scale and technical expertise within these. The Modi government, however, wanted chosen firms to straddle the entire manufacturing process, a decision which called for both deep pockets and wider technological knowhow.

The government’s plan to choose “national champions” felt tricky as well. Even experienced venture capitalists struggle to spot the winners of tomorrow. And so, could the NDA’s ministers and bureaucrats do a better job?

Nonetheless, the PLI was a consequential affair. “In solar, we were too late,” a Pune-based ACC battery expert had told me in 2022. “That was not the case with battery storage. The global race for advanced battery manufacturing was just starting to take off.” 

And so, firms and sector observers waited to hear about the winners.

Rajesh Exports, Hyundai Global Motors

When it came, the final list was jaw-dropping.

Amongst the 10 companies which applied were Exide and Amara Raja, both already working on ACC batteries. Neither, however, made the cut. Instead, Reliance New Energy Solar, Ola Electric Mobility, Rajesh Exports and Hyundai Global Motors did.

The first three were new to batteries. Ola hailed from ride-sharing. Reliance, from petrochemicals and telecom. As for Rajesh Exports, it is the gold-refining firm currently in the news for inflating its revenues by Rs 15 lakh crore. Hyundai Global Motors was, perhaps, the only understandable choice.

Or so observers thought. That July, though, Hyundai Motor Company of South Korea released a statement saying: “Hyundai Motor Company and HMIL urges the general public, traders, business........

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