Context:

India’s drive toward clean energy, advanced electronics, and strategic technologies has placed critical minerals—such as lithium, cobalt, and rare earth elements—at the forefront of national policy discussions. The launch of the National Critical Mineral Mission (NCMM) and recent export restrictions imposed by China have exposed India’s vulnerability and underscored the urgent need for self-reliance.

What Are Critical Minerals?

Critical minerals are essential natural resources vital for economic security and the clean energy transition. They are often scarce domestically and subject to high geopolitical risks.

Key Examples: Lithium, cobalt, nickel, graphite, rare earth elements, silicon.

Why Are Critical Minerals Strategically Important for India?

• Energy Transition: India is 100% dependent on imports for lithium, cobalt, and rare earths, threatening the future of its electric vehicle (EV) and battery industries.
• Technological Sovereignty: Access to critical minerals is crucial for India’s autonomy in telecom, AI, defense, and semiconductor technologies.
• Geopolitical Leverage: Reducing reliance on China-centric supply chains strengthens India’s standing in the Indo-Pacific region and within alliances like the Quad.
• Industrial Growth: Production-Linked Incentive (PLI) schemes for electronics, EVs, and solar manufacturing require assured access to these raw materials.
• National Security: Rare earths are indispensable for military applications such as surveillance, navigation, and missile systems.

India’s Policy Measures

National Critical Mineral Mission (NCMM):

• Launched in 2024 under the Ministry of Mines.
• Focused on securing supply chains through enhanced exploration, refining capabilities, and strategic reserves.

Mining Laws and Auctions:

• Amendment to the MMDR Act authorized auctions for 30 critical minerals.
• Five auction rounds completed with over 400 exploration projects planned.

International Cooperation:

• Member of the Mineral Security Partnership alongside the US and Australia.
• Bilateral agreements with Argentina and Bolivia for lithium sourcing.
• Active engagement through multilateral forums such as the Quad, G20, and BRICS.

Challenges Facing India’s Critical Mineral Sector

• Heavy Import Dependence: India imports nearly all lithium, cobalt, and rare earths, while China controls 70–90% of global midstream processing.
• Limited Domestic Capacity: Exploration is still at an early stage; refining and value addition infrastructure remain inadequate.
• Weak Private Sector Interest: Auctions have seen low participation due to technical complexity and high financial barriers.
• Environmental and Social Concerns: Most mineral deposits are in ecologically and tribally sensitive regions, leading to legal delays and ESG compliance issues.
• Lack of Circular Economy: Battery and e-waste recycling is fragmented and informal, with no formalized infrastructure or incentives.

Strategic Roadmap for India

• Develop Midstream Infrastructure: Establish dedicated mineral processing zones with PLI-style incentives and promote public-private partnerships in refining and processing technologies.
• Boost Exploration and Auctions: Strengthen Geological Survey of India capabilities, offer geodata transparency, and provide financial de-risking mechanisms for investors.
• Promote Green and Inclusive Mining: Enforce strict ESG standards, conduct independent audits, share benefits with local communities, and streamline environmental clearances without compromising standards.
• Build Circular Economy: Invest in formal battery and electronics recycling infrastructure, incentivize high-efficiency recovery systems through tax breaks and subsidies.
• Diversify Supply Chains: Pursue “friendshoring” strategies by partnering with trusted nations and leverage diplomatic channels to secure stable, long-term mineral trade agreements.

Conclusion

Critical minerals form the foundation of India’s future industrial growth, environmental sustainability, and strategic autonomy. While the NCMM marks a significant step forward, its success hinges on continuous policy reforms, strengthened global partnerships, and robust capacity building. India’s path must balance Atmanirbharta (self-reliance) with sustainability, equitable community development, and forward-looking strategic planning.

Source: IE