India’s reliance on China for critical minerals

Context

India’s economic growth and national security hinge on critical minerals. However, its heavy reliance on imports, especially from China, poses strategic challenges that need urgent attention.

Relevance

GS-02 (Mobilization of resources)

Dimensions of the Article

India’s Reliance on China for Critical Minerals
Why India Depends on Imports
Significance of the Dependence

India’s Reliance on China for Critical Minerals

India is acutely dependent on China for several critical minerals. Between 2019 and 2024, import data highlights a dependency of over 40% for six critical minerals:

Bismuth (85.6%): Used in pharmaceuticals and chemicals; China controls 80% of global refinery production.
Lithium (82%): Key for EV batteries and energy storage; China refines 58% globally.
Silicon (76%): Essential for semiconductors and solar panels; limited global processing technology.
Titanium (50.6%): Vital for aerospace and defence; switching costs are high.
Tellurium (48.8%): Needed for solar panels; China produces 60% of the global supply.
Graphite (42.4%): Critical for EV batteries; China dominates 67.2% of global production, including battery-grade material.

Why India Depends on Imports

Structural Challenges

Many critical minerals in India are deep-seated, requiring advanced mining and exploration technologies.
High-risk investments deter private sector participation due to a lack of incentives and policy support.

Limited Processing Capability

India lacks the technology to process complex resources.
For instance, the newly found lithium deposits in Jammu and Kashmir (5.9 million tonnes) remain untapped due to technological gaps in extraction from clay deposits.

Significance of the Dependence

China’s dominance stems from:
- An extensive resource base, with 173 mineral types discovered.
- Strategic investments in mining and refining, controlling 87% of rare earth processing, 58% of lithium refining, and 68% of silicon processing globally.
- Midstream refining capabilities and control over key minerals like gallium, germanium, and antimony, making it an indispensable player in global supply chains.
For India, this overreliance poses risks:
- Supply chain vulnerabilities during geopolitical tensions.
- Economic and strategic challenges in securing vital resources for high-tech manufacturing, defence, and renewable energy sectors.

Way Forward

India is adopting a multi-pronged strategy to mitigate dependency:
Securing overseas assets:
• KABIL Initiative: A joint venture of three state-owned enterprises to acquire mineral assets abroad.
• Partnerships with global alliances like the Minerals Security Partnership and Critical Raw Materials Club to diversify sources.
Building domestic capabilities:
• Increased funding for research through institutions like the Geological Survey of India and CSIR.
• Production-linked incentives for recycling critical minerals.
• Promoting a circular economy to reduce virgin mineral dependency.
Policy Reforms and Investments:
• Incentivising private sector investments in high-risk mining projects.
• Developing technologies for processing deep-seated and complex mineral deposits.
Strategic Focus on Resilience:
• Strengthening ties with allies for secure supply chains.
• Encouraging self-reliance through sustainable mining practices.