The partnership aims to establish a 60,000-tonne lithium-ion refinery and cell factory in Paradip, Odisha, the two people said on condition of anonymity as the talks are currently private.

The technology transfer agreement, expected within the next five to six weeks, comes in the backdrop of Indian and global firms increasingly looking to adopt Chinese expertise in advanced, cost-efficient battery technologies for electric vehicles. 

Chinese firms have been engaged in a tough fight with global automotive giants to expand their share of the EV market within and outside of China.

JSW Group did not respond to Mint’s request for a comment on the story.

With geopolitical and policy uncertainties influencing partnership strategies, Indian companies are opting for technology transfers from China instead of establishing joint ventures. 

This move is part of a broader trend in which companies like Hyundai Motor Co and Kia Corp are engaging with Chinese cell manufacturer SVOLT through a technology partnership with Indian battery manufacturer Exide Energy, bypassing more expensive options from South Korean cell manufacturers such as LG Chem.

Ironically, while the government actively incentivizes the setup of cell manufacturing capabilities in India through various production-linked incentive (PLI) schemes, including those for advanced chemistry cells crucial for electric vehicles and renewable energy storage systems, the effort to promote domestic industries and reduce dependency on imports from China requires first obtaining these advanced cell technologies from China, which is the global leader in EV battery technologies.

“JSW’s strategy is to secure affordable and battery technology and make electric cars and commercial vehicles economically viable compared to combustion engines, as well decrease its reliance on Chinese supply chains”, one of the persons cited above said. “JSW aims to initially match and with scale, eventually undercut Chinese cell production costs through localized manufacturing and technological adaptation.”

JSW’s integrated EV project in Paradip, Odisha, which will be constructed at an investment of ₹40,000 crore, is a central component of JSW’s strategy to support its renewable energy goals, as well as its new joint venture with SAIC’s MG Motor India to bring down costs via high levels of domestic value addition.

The factory’s operation is slated to begin within the next three to four years, one of the two persons quoted above told Mint.

“By transitioning to advanced battery technologies through international technology transfers, Indian companies like JSW are laying the groundwork for enhanced, more competitive EV production capabilities at home,” a senior industry executive said on condition of anonymity. “ This move not only reflects a shift towards greater technological integration from abroad but also ultimately aims to build a more sustainable and self-reliant automotive industry in India.”

The $23 billion JSW Group wants to make EVs its new crown jewel, setting an ambitious target of selling 1 million EVs in India by the end of the decade and securing a third of the country’s market for electric cars.

Last week, Mint reported that the joint venture between MG Motor India and JSW Group is taking its crucial first steps to set itself up as a highly localized, cost-efficient Indian auto manufacturing firm, leveraging the Jindals’ entrepreneurial experience of working in India’s competitive market.

Over the next few weeks, the alliance will also begin to announce key partnerships for acquiring integrated e-drive units, which will be key to cost efficiency and production optimization for its electric vehicles.