Context: Reliance on critical mineral imports, especially from China, poses strategic concerns. To address this, the Indian government is advancing its Mineral Diplomacy to enhance security and reduce strategic vulnerabilities.

• China controls 60% of rare earth production, 60% of critical minerals production and 80% of the processing worldwide. 

• Hence, to mitigate India’s strategic vulnerabilities and ensure mineral security, it has launched proactive efforts in mineral diplomacy.

What is Mineral diplomacy? 

• Mineral diplomacy refers to a nation’s strategic efforts to secure critical mineral supplies through international partnerships, trade agreements, and resource-sharing initiatives, ensuring economic stability and reducing geopolitical vulnerabilities.

India’s Mineral Diplomacy of 2024

• Aim: To coordinate efforts in securing access to critical minerals both domestically and internationally. It focuses on enhancing resource mapping, accelerating exploration activities, and developing resilient supply chains for minerals vital to India’s industrial and green energy targets.

Key Features

• International Partnerships: India is actively engaging with resource-rich countries, particularly in Africa, to secure essential minerals. This includes participation in the Mineral Security Partnership (MSP) and bilateral agreements like the India-Australia Critical Minerals Investment Partnership, which are designed to fortify supply chains and position India as a key player in global mineral diplomacy.

• Domestic Reforms: The Mines and Minerals (Development and Regulation) Amendment Bill, 2023 allows private sector participation in exploring critical minerals. This reform is expected to boost domestic supply and reduce reliance on imports, aligning with India’s goal of achieving self-sufficiency.

• Geopolitical Context: As global competition for critical minerals intensifies, India’s mineral diplomacy is not just about securing resources but also about establishing itself as a significant player in the clean energy economy.

• India is emphasizing responsible mining practices to differentiate itself from competitors like China.

• Focus on Recycling: The mission prioritizes recycling critical minerals from electronic waste and used batteries, ensuring resource efficiency and sustainability amidst limited reserves.

• Investment in Technology: India plans to leverage advanced technologies such as AI and machine learning for geological mapping to enhance exploration efforts.

Pillars of India’s Mineral Diplomacy
Establishing Joint Ventures

• KABIL’s (Khanij Bidesh India Ltd.) International Partnerships: Secured agreements with mineral-rich countries like Australia & Argentina; also, acquired strategic critical mineral assets in Bolivia and Chile.

• India-Central Asia Collaboration: India and Kazakhstan formed a joint venture to produce titanium slag. 

• India also proposed an India-Central Asia Rare Earths Forum to tap region’s critical mineral resources.

• Ensuring Cooperative Engagements: By forging partnerships with minilateral and multilateral initiatives related to mineral security, such as:

• Quad (Australia, Japan, India, the United States), Indo-Pacific Economic Framework for Prosperity (IPEF), Mineral Security Partnership (MSP) and the G-7, for cooperation in the critical mineral supply chain.

Despite the positive outcomes of India’s mineral diplomacy, several challenges hinder its effectiveness:

• Lack of Private Sector Participation: The absence of a clear roadmap for private sector involvement in the critical minerals supply chain limits India’s ability to leverage domestic capabilities fully.

• Weak Diplomatic Capacity: Insufficient diplomatic resources and expertise in mineral diplomacy pose challenges in forming sustainable international partnerships.

• Need for Comprehensive Strategy: A cohesive strategy that integrates private sector roles and addresses supply chain vulnerabilities is essential for enhancing India’s mineral security efforts. The current lack of such a strategy hampers effective engagement with international partners.

Road Ahead

• Develop a Comprehensive Critical Minerals Policy: Formulate a cohesive strategy integrating private sector participation, incentivizing domestic exploration, and addressing supply chain vulnerabilities.

• Strengthen Mineral Diplomacy Capacity: Expand diplomatic resources and expertise in mineral partnerships, focusing on resource-rich nations and multilateral platforms. Establish specialized teams to negotiate sustainable agreements, ensuring secure and diversified supply chains.