【By Observer News Network, Yuan Jiaqi】

After being forced to stop purchasing Russian oil due to pressure from Washington last year, India's richest man Mukesh Ambani now has a new problem: China's technology transfer restrictions.

Ambani's Reliance Industries Limited is one of India's largest and most influential diversified private enterprises, with business areas covering petrochemicals, fast-moving consumer goods, and other fields. In recent years, it has been continuously increasing its investment in the production of new energy batteries.

Bloomberg reported on the 21st, citing sources that Reliance Industries has suspended its plan to produce lithium batteries in India after failing to obtain advanced Chinese technology. The Chinese companies that had originally planned to discuss battery technology licensing cooperation have also withdrawn from the project.

In July 2025, the Ministry of Commerce of China, together with the Ministry of Science and Technology, adjusted and issued the "Catalogue of Technologies Prohibited or Restricted for Export in China" (hereinafter referred to as the "Catalogue"). Among them, an additional restricted technology item was added, namely, the preparation technology of battery cathode materials, including three control points: the preparation technology of lithium iron phosphate for batteries, the preparation technology of lithium manganese iron phosphate for batteries, and the preparation technology of phosphate-based cathode raw materials.

Regarding the newly added restricted items such as the preparation technology of battery cathode materials, our Foreign Ministry, Ministry of Commerce, and others have clearly stated that the relevant adjustments are routine adjustments made in accordance with convention to the "Catalogue," and do not target specific industries (or specific countries). This is a specific measure to adapt to China's technological development changes and improve technical trade management, aiming to safeguard national economic security and development interests and promote international technological and economic cooperation.

U.S. media interpreted that the transfer of China's battery production technology overseas now requires official approval. Although this tough stance is not specifically targeting India, it still causes deep concerns for India, which highly depends on external technology, about the "chokepoint" risk.

This concern stems from the real shortcomings in India's new energy industry. According to the Modi government's plan, by 2030, the sales of new energy vehicles in India must account for 30% of total vehicle sales. Enhancing local battery manufacturing capabilities is seen as key to achieving this goal. However, currently, India's new energy vehicle batteries mostly rely on imports, and the lack of core technologies severely restricts industrial development.

To solve this dilemma, about five years ago, the Indian government allocated 181 billion rupees (approximately 2 billion USD) in fiscal subsidies, planning to support the construction of a total of 50 GWh of battery capacity in the country. However, to date, only 1 GWh of capacity has actually been built.

In stark contrast to the bleak performance of domestic capacity, the import volume of lithium-ion batteries by Indian electric vehicle manufacturers and related companies has increased by 2.5 times, reaching 3 billion USD, of which 75% of the imports come from China.

Import volume of lithium batteries in India - Bloomberg map

For this reason, from Ambani to infrastructure magnate Gautam Adani and steel giant Sajjan Jindal, many top Indian business leaders view China as an important way to solve their technological shortcomings.

Other than Reliance Industries, Exide, India's largest manufacturer of traditional lead-acid batteries since 1947, also plans to enter the lithium-ion battery field with Chinese technology; its competitor Amara Raja Energy and Mobility has already reached a technology licensing agreement with a subsidiary of Anhui Hefei Guoxuan High Tech.

But this also exposed another hidden danger in India's technological development: Indian companies generally lack willingness to invest in R&D. Currently, India's universities, laboratories, and companies are significantly lagging behind Chinese competitors in terms of technology.

U.S. media pointed out that this shortcoming not only severely hinders indigenous technological breakthroughs but also continues to weaken the market competitiveness of Indian companies.

India's universities, laboratories, and companies are significantly lagging behind Chinese competitors in terms of technology.

Take Nepal as an example, four out of five cars on sale in the Nepalese market are electric vehicles, and China's leading electric vehicle company BYD has firmly occupied the top position in the market. Indian fuel cars that once dominated the Nepalese market are no longer popular, and Indian-made electric vehicles also struggle due to inferior quality and price competitiveness.

"The over-reliance on Chinese technology highlights the limitations of Modi's 'Make in India' industrial policy," the report pointed out. Currently, the Indian government is still worried about the rare earth issue, and if it cannot master the core technology of using local minerals to produce high-performance magnets, India's dependence on Chinese technology may persist for a long time, and the path to self-reliance in its new energy industry still faces numerous obstacles."

It is worth noting that recently, there were reports that the Indian Ministry of Finance plans to cancel a measure that has been in place for five years, restricting Chinese companies from participating in Indian government contract bids. This is another sign of the improvement in Sino-Indian relations, following the restoration of direct flights and simplified visa applications.

This restriction was introduced after the 2020 Sino-Indian border conflict. It not only required Chinese bidders to register with a designated committee of the Indian government, but also required strict political and security approvals. These layers of barriers have completely excluded Chinese companies from the Indian government contract bidding market, which is valued at 700 to 750 billion USD.

The South China Morning Post previously cited analysts' views that the Indian government's plan to cancel the measures could mark the gradual shift of the long-tense Sino-Indian relationship towards "normalization" and "calibrated pragmatism".

Srividya Jandhyala, an associate professor at the Asia-Pacific campus of France's Essec Business School, pointed out that rebuilding economic ties with China could attract new foreign investments and bring Chinese technology to India. "At a time when foreign direct investment (FDI) flows into India have sharply declined, this is particularly important."

However, Jandhyala warned that it is not advisable to be overly optimistic about the prospect of large-scale return of Chinese companies to the Indian market, because Chinese confidence in the Indian market still needs time to rebuild.

"In recent years, Chinese companies have encountered many challenges in the Indian and Western markets, and have already diversified their operations to other markets in Asia and around the world. Therefore, Chinese companies may not prioritize India as an investment option."

She emphasized that merely lifting policy restrictions is not enough. Chinese companies are also seeking deeper guarantees, such as market trust, market opportunities, and investment security.

Natasha Agarwal, co-founder of the Mumbai "Global South Convergence Forum," bluntly said that India has done too little to alleviate the concerns of Chinese companies and has achieved little so far. "Companies cannot operate in an environment full of uncertainty."

She said that China has already established a clear status in international politics. When dealing with relations with India, China will take actions based on its understanding of India-US relations and its potential impact on China.

"China will decide whether to cooperate based on its own wishes, after comprehensively weighing economic and non-economic costs," she added.

This article is an exclusive contribution from Observer News Network and may not be reproduced without permission.

Original: toutiao.com/article/7597644008499790377/

Statement: The article represents the views of the author.