India stands at a crucial crossroads as Reliance Industries’ burgeoning partnership with Chinese battery manufacturer Hithium Energy threatens to undermine the nation’s ambitious plans for transparent and ethical supply chains in the renewable energy sector.
The Global Battle for Ethical Supply Chains
Global competition intensifies between China and Western nations regarding manufacturing practices. China dominates battery production and raw material refining worldwide. However, significant differences exist between Chinese and Western business approaches. Western markets increasingly demand environmental, social, and governance compliance. They require transparency throughout sourcing, refining, and manufacturing processes.
India’s Critical Choice in Ethical Supply Chains
India faces a fundamental decision about its economic future. The nation must choose between aligning with Chinese battery production or ensuring Western market access. South Korea and Japan already selected Western alignment for their interests. These countries now lead battery exports to Western markets. Specifically, South Korea provided 60% of EU electric vehicle batteries in 2024. Meanwhile, Japan supplied 35% of US battery imports during the same period.
Reliance-Hithium Partnership Risks
The emerging Reliance-Hithium collaboration presents multiple concerns for India’s ethical supply chains:
• Governance opacity: Hithium maintains close ties with Chinese military and political entities
• Human rights issues: Connections to alleged forced labor practices in Xinjiang
• Environmental damage: History of pollution and poor waste management in African operations
• Transparency deficits: Documented issues in fiscal reporting and operational disclosure
Shipping records reveal increasing cooperation between these companies throughout 2024. Battery component shipments exceeded $4 million in value.
Western Market Requirements for Ethical Supply Chains
The European Union established stringent battery regulations demanding:
• Ethical labor practices and working conditions
• Carbon footprint disclosure
• Recyclability requirements
• Complete supply chain traceability
These standards make EU markets particularly desirable for growing manufacturing ecosystems. The EU will represent nearly 20% of global battery demand by 2030.
Alternative Paths for Indian Ethical Supply Chains
India possesses opportunity to build truly ethical supply chains despite challenges. The initial effort required appears substantial but offers significant long-term benefits. Environmentally and socially conscious business practices increasingly attract international partners. Many countries struggle with industrial development’s environmental and social consequences. India could lead in sustainable battery production practices.
Frequently Asked Questions
Why is the Reliance-Hithium deal concerning for India?
The partnership risks India’s access to Western markets that require stringent ethical and transparency standards in supply chains.
What percentage of EU batteries came from South Korea in 2024?
South Korea supplied 60% of all electric vehicle batteries sold in the European Union during 2024.
What are the main ethical concerns with Chinese battery production?
Primary concerns include forced labor allegations, environmental damage, governance opacity, and intellectual property issues.
How does the EU Battery Regulation affect international suppliers?
The regulation mandates ethical labor practices, carbon footprint disclosure, recyclability requirements, and complete supply chain traceability.
What advantages does India have in building ethical supply chains?
India can leverage growing international demand for sustainable production and avoid the environmental and social issues plaguing existing supply chains.
What evidence exists of Reliance-Hithium collaboration?
Shipping records from 2024 show increasing battery component shipments valued over $4 million between Hithium China and Reliance India.
