Critical Minerals and India’s Strategic Imperative – Building Resilience for the Future
Context: Strategic Value of Critical Minerals
- Critical minerals underpin clean energy, digital transformation, and national security.
- India’s import dependence and limited processing capacity threaten its long-term autonomy.
- Securing these minerals is vital to achieve Atmanirbharta (self-reliance) in key industries like EVs, semiconductors, and defence.
What Makes Minerals ‘Critical’
- Defined by:
- High importance for strategic sectors (e.g., lithium, cobalt, REEs).
- High risk of supply chain disruption due to geographical concentration and geopolitical control.
- Demand is driven by:
- The energy transition
- Digitalisation
- Global efforts for supply chain resilience
Geopolitical Landscape: The China Factor
- China dominates global supply chains:
- 90% of REE refining
- 70% of cobalt processing
- 60% of lithium conversion
- China’s lead stems from decades of industrial planning and strategic foresight.
- India remains highly vulnerable to external supply shocks, particularly from Chinese export curbs.
India’s Policy Response
- 2022: Ministry of Mines identifies 30 critical minerals.
- 2025: Launch of the National Critical Mineral Mission (NCMM) to secure end-to-end supply chains.
- Ongoing exploration:
- 195 projects in the past year
- 227 approved for the upcoming year
Challenges in Exploration and Auctions
- MMDR Act amendments facilitated critical mineral auctions.
- Five rounds completed, but low private participation due to:
- High capital requirements
- Lack of processing technology
- Regulatory and logistical hurdles
India’s Midstream Weakness
- India lacks capability in refining and chemical conversion, leading to continued dependence on foreign refineries.
- Battery-grade lithium, cobalt, and nickel processing is still in nascent stages.
Proposed Industrial Interventions
- Establish mineral processing zones near mining hubs.
- Introduce PLI schemes for refining and separation technologies.
- Incentivise private investment in midstream industries through credit support and regulatory facilitation.
Geopolitical and Strategic Risk Management
- Recent Chinese export restrictions on REEs have directly affected India’s EV and electronics sectors.
- Strategic steps needed:
- Build independent supply chains
- Deepen partnerships with Australia, Argentina, and other resource-rich nations
- Engage with Quad, G20, and Minerals Security Partnership (MSP) for strategic alignment
Sustainability and Circular Economy Approach
- Promote battery and e-waste recycling to reduce raw material imports.
- Barriers to circular economy:
- Dominance of informal sector
- Lack of efficient and formal recycling infrastructure
- Sustainable mining:
- Mineral reserves often lie in tribal and ecologically sensitive areas
- Requires ESG compliance, community consent, and benefit-sharing models
Policy and Strategic Realignment
- Conduct regular demand–supply assessments of critical minerals.
- Create strategic stockpiles to cushion against global price and supply volatility.
- Align mineral, industrial, energy, and foreign policies for coherent national strategy.
Conclusion: A Strategic Imperative
India stands at a pivotal juncture. To ensure energy security, technological competitiveness, and strategic autonomy, India must:
- Reduce external dependence
- Invest in domestic capabilities
- Embed sustainability and resilience in its critical mineral value chain
With focused policy execution, India can emerge as a major global hub in the critical mineral economy and support its broader geopolitical and economic ambitions
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