What is Indian Strategy to gain Critical Minerals?

Why Critical Minerals hold Strategic Importance?

First, critical minerals are those minerals  are called ‘critical’ because they are very important for modern and future industries and processes like transition to clean energy, electronics industry, defence, aerospace, automation and AI based operations etc. More specifically these minerals are used in solar panels, battery storage, wind turbine, semiconductors and the entire range of electronics. Thus, the present pathways of clean energy transition and use of electronics is critically dependent on the availability of critical  minerals. In the prevailing geopolitical environment, critical minerals have risen rapidly up the policy agenda as a cornerstone of energy and economic security (IEA:2025). Some of these minerals are: lithium, cobalt, nickel, cooper and rare earth elements etc. Thus, their production, processing and supply becomes a priority for all economies particularly the emerging economies like India. That is why these minerals are also called ‘strategic’ minerals. In view of the rising importance of critical minerals for economic and technological growth, it would be safe to say that the countries which fail to ensure the supply of critical minerals in coming decades will fail to compete in economic and technological development. This has brought a mad rush among countries both developed and developing for the acquisition and supply of critical minerals. When China placed restriction on the supply of critical minerals and its products to the US, the President Trump has to travel to Seoul to meet Chinese President Xi Jinping in October, 2025 to arrange a trade off for the supply of these minerals. India is no exception.

Second, these minerals are critical for future growth, but their production, processing and supply is not evenly distributed across nations. According to  the Global Critical Mineral Outlook, 2025, China dominates the production, processing and supply of these critical minerals in the world. China holds 91 percent global share in the processing and 70 percent global share in the supply of many of these critical minerals. In the production and supply of sintered permanent magnates, China’s global share has risen to whopping 94 percent. The sintered permanent magnates are used in  cars, wind turbines, industrial motors, data centres and defence systems (IEA:2025). China’s dominance on critical minerals is the outcome of her decade old policy of ‘Make in China’ launched in 2015. China has developed enormous capability for mining, processing, and manufacturing of critical minerals and its products. However, for last few years, the supply and processing of these minerals have been weaponized by the countries which dominate global supply of these minerals. China is keen to make strategic use of her monopoly in critical minerals. In April, 2025, China imposed restrictions on the supply of seven rare earth elements: dysprosium, gadolinium, lutetium, samarium, scandium, terbium, and yttrium as well as permanent magnets. Further in October, 2025, China not only expanded the list of restricted minerals but also imposed fresh ban on the supply of permanent magnets to other countries including India (Redikar:2025). India is nearly 100 percent dependent on the imports of permanent magnets. China’s export restrictions on permanent magnets hurt India’s automobile industry as India’s auto sector imported 460 tons of rare earth magnets, mostly from China, in the financial year 2024-25. India is expected to import 700 tons magnets worth $30 million this year from China (Shah:2025). Though after rounds of diplomatic negotiations, chia lifted the ban in August, 2025, but  this episode was a wake-up call for India as its dependence on external and unpredictable sources for critical minerals may derail its future development. Alternatives sources of import of permanent magnets from outside China were available, but at a steep cost (Hindustan Times: 2025).

The complexity of India’s dependence on China arises from the fact that China’s always unpredictable and India has many long term and serious differences with China. Thus, only alternative left for India is to make a serious quest for the production, processing and supply of critical minerals to ensure her economic security and sustained development. In fact, India’s dream for Viksit Bharat @47 cannot be realized without India critical mineral security.

India’s Quest for Critical Minerals

It was in this background that India has launched various initiatives for last three years to security extraction, processing and supply of critical minerals. India’s strategy consists of two sets of components: Domestic mining and procession; and international collaboration.

1. Components of India’s Domestic India’s Strategy for Critical Minerals:   It consists of following recent initiatives:

1. New Legal Regime for Critical Minerals: In 2023, India amended the  main law on minerals, the Mines and Minerals (Development and Regulation) Act, 1957 in August 2023 for facilitating the exploration and mining of critical minerals. For this purpose, 24 critical minerals were placed in new Part D of the Schedule I of the act. Not only that, as an exception, the Union government of India was empowered to auction the exploration of critical minerals. In case of other minerals this power lies with the state governments. The ACT was further amended to put in place a simpler regime for promoting conservation of minerals, zero waste mining and extraction of deep-seated minerals with provisions like market development, extension of area and license time (PIB:2025). It needs to mentioned here that while the terms ‘critical mineral’ a general term, which includes all mineral important for economic use, that may also include some REE, but the term rare REE (rare earth elements) is a scientific term used for 17 minerals separately classified in the Periodical Table. Thus, the list of REE would be same for all countries, the list of critical minerals would differ from country to country depending their specific requirement and availability.
2. National Critical Mineral Mission (NCMM): The Government of India has launched an ambitious national mission called NCMM on 29 January, 2025 for a seven-year period from 2024-25 to 2030-31 with total outlay of Rs 18000 crores (Ministry of Mines: 2026). It has two main objectives:

1. Secure a long-term sustainable supply of critical minerals; and

2. Strengthen India’s critical mineral value chains encompassing all stages from mineral exploration and mining to beneficiation, processing, and recovery from end-of-life products.

The NCMM has Seven Components:

1. Enhancing domestic exploration of critical minerals
2.  Acquiring foreign critical mineral assets
3. Recycling of critical minerals
4. Promotion of Trade and Markets for critical minerals
5. Promoting Research and Development in the field of critical minerals.
6. Skill development in the field of critical minerals
7. Financial incentives for the development of critical minerals.

Implementation of India’s critical mineral strategy- India’s critical mineral strategy is contained in the new legal regime under the MMDA, 1957 (as amended in 2023 and 2025) and NCMM, 2025. Since critical minerals have occupied central focus of the government, the implementation of this strategy has produced some notable gains in the short period.

1. In a reply to Lok Sabha on 20 August, 2025, the Ministry of Mines, Government of India informed that till date 34 auctions have been carried out for critical minerals and Geological Survey of India is focusing on the 94 projects for the exploration of rare earth elements (REE) (Sansad:2025). It should be noted that the Critical Mineral Mining Projects have been included as projects of Security and strategic importance and exempted from public hearing during environmental clearance. Further, these projects will now be appraised at Central level irrespective of lease area involved in any state. This would facilitate smooth environmental clearance for critical mineral mining projects.
2. Since critical minerals are used extensively in electronics, the recycling of critical mineral is viable policy to acquire these minerals from used appliances like battery, phone computes and discarded solar cells and motors. In view of this, the Government of India has launched the Critical Minerals Recycling Scheme on 03 September, 2025 for six-year period with allocation of 1500 crores. The scheme aims at targeted recovery of critical minerals from e-waste, lithium-ion batteries, and scrap, providing up to 20 percent capex subsidies and performance-linked opex (operational expenditure) support to enhance circular economy goals PIB:2025a). 
3. Government of India also launched a Rs 7280 crore scheme in November, 2025 for the domestic manufacturing of sintered permanent magnets in India. The scheme aims to domestically manufacture 6,000 Metric tonnes Per Annum (MTPA) magnets, covering the full chain from processing of rare-earth oxides to finished magnets. At present, except for defence sector, India is totally dependent on the import of permanent magnets mainly from China. Thus, this scheme will go long way to ensure domestic supply of permanent magnets for India (PIB:2025b).
4. Dedicated Corridors– During the 2026-27 Budget the government of India has announced the establishment of dedicated corridors of REE in four states- Odisha, Tamil Nadu, Andhra Pradesh and Kerala, which has abundant deposits of rare earth elements in India. This will ensure a focused attention on the mining, processing of REE in India.
5. International Collaboration

The second component of India’s critical mineral strategy is actively promoting international collaboration for the supply and development of critical minerals. Some of the major global initiatives by India are:

1. India has already set up its external mining arms called KABIL (Khanij Videsh India Limited). The KABIL has signed agreement with Argentina to acquire five blocks of lithium in Catamarca region of Argentina. The production is likely to commence in 2029. KABIL has also signed similar agreement with Australia to acquire five lithium blocks for mining. Besides KABIL, other PSUs like Coal India Ltd., Oil India, ONGC-Videsh are also jointly evaluation the critical mineral projects for future bidding.
2. India is actively collaborating with leading countries like the US, Japan, UK, France and Germany for the technological support and supply chain stability in the field of critical minerals. India and the US have signed the TRUST (Transforming Relationship by Utilizing Strategic Technology) Initiatives in February, 2025 which, among other things, makes provision for collaboration between the two nations  for securing, mining, and processing critical minerals—specifically lithium, cobalt, and rare earth elements as well as  strengthen supply chains. Earlier this initiative was known as iCET (Initiative on Critical and Emerging Technologies).

In July 2023, India and France launched strategic dialogue initiative called Horizon 2027 for dialogue and cooperation for next 25 years. Among other things, this partnership dialogue focuses on minerals essential for the energy transition, including rare earths, lithium, and copper, which are vital for electric vehicles, solar energy, and defense.

The India-UK Critical Minerals Initiative (2025-26), centered on the Technology Security Initiative (TSI) and the Critical mineral Supply Chain Observatory (phase III), aims to secure resilient, sustainable supply chains for vital minerals like lithium, cobalt, and graphite. India-U.K. Technology Security Initiative (TSI) was launched in July, 2024 to enhance strategic cooperation in critical minerals and emerging technologies like AI, Semiconductor and Quantum technologies.

A trilateral initiative known as the Australia-Canada-India Technology and Innovation partnership (ACITI) was launched on November 22, 2025 by the leaders of three countries during the G20 Leaders’ Summit in Johannesburg in November, 2023.  to strengthen cooperation on critical technologies, AI, critical minerals and resilient and supply chains.

India and Japan are also strengthening cooperation in the field of critical minerals and supply chains, as Japan is also facing critical mineral supply chain restrictions from China. The India-Japan Economic Security Dialogue,  was started in November 27, 2024. This dialogue  focuses on strengthening supply chain resilience, strategic trade and technology, critical minerals, and digital infrastructure. In August, 2025 during the visit of the Indian PM Narendra Modi to Japan, both countries issued the Economic Security Fact Sheet for  strengthening partnerships for semiconductor manufacturing and critical mineral security (MEA:2025). 

Also,  India and Canada have taken bilateral  initiative in January, 2026 to strengthen their partnership on critical minerals, focusing on supplying lithium, cobalt, graphite, and rare earth elements to support India’s EV and clean energy sectors. This also includes high level critical mineral Annual Dialogue, which is scheduled in March 2026 in Toronto.

Besides, these major initiatives, India ahs also signed agreements with Gulf countries and African countries like Cote de’ Ivoire for the supply of critical minerals.

• Multilateral collaboration is equally pronounced for strengthening supply chain resilience in critical minerals. The major global forums where India plays leading role like G-20 and QUAD have laid emphasis on strengthening global supply chains for critical minerals. Also, India has been invited by the US to participate in the recently launched global initiative called  Pax Silica by the US and other nine countries. Launched in December, 2025 by the US, Pax Silica aims to insulate critical technology supply chains from geopolitical disruptions, focusing on AI, chips, and critical minerals (Kartik:2026).

The domestic and external components of India’s strategy for critical minerals signifies  anew urgency at both levels. At the domestic level, India is leveraging all possible resources for the production and processing of available critical minerals resources. At global level, India is trying to acquire critical mineral resources and technology as well as strengthening supply chain resilience by bilateral and multilateral collaboration. It proves that ensuring supply of critical minerals has become a priority area of focus in both her domestic policy and foreign policy in recent years. Though India is late starter in comparison to China in the field of critical minerals, the pace of her diplomacy and initiatives are promising.

Challenges Ahead

Though India ahs launched a fast pace programme for acquisition and supply of critical minerals to meet her growing needs for clean energy and technological and economic development, it faces many short-term and long-term hurdles. The Ministry of Mines (2026) has identified the following five challenges in India’s quest for critical mineral self-sufficiency: Low Resource availability, not commercially viable for extraction; High-Risk exploration and mining; long gestation period and high investment; Geographical concentration of processing technologies and resources/reserves;  Fiscal and policy support by major economies to attract investment across the critical minerals value chain. Some of these challenges are discussed below:

1. Technological Deficit: Mining and processing of critical minerals, especially rare earth minerals are complex process and need advanced technology. Similarly, product manufacturing from these minerals also involves separate complex technology.  India has abundance of rare earth minerals but lacks technology to process and produce meaningful products. Hence India’s large amount of REE are exported to other markets and India has to imports manufactured products like Permanent Magnets from other countries like China. For example, India has proven deposits of 6.9 million tonnes of rare earth oxides (RRE), which is third largest deposits in the world after China and Brazil. These deposits are mainly concentrated in  monazite sands of Kerala, Tamil Nadu, Gujarat, Orissa and Andhra Pradesh. The assessed deposits of monazite sands are 12.2 million tonnes in India (Indian Bureau of Mines: 2023). India has found significant deposits of lithium in Reasi district of Jammu and Kashmir, but India is not able to harness the same due to lack of technology. Consequently, in order to meet her requirement, India is 100 percent dependent on import from external sources with respect to 10 critical minerals- lithium, cobalt, nickel, vanadium, niobium, germanium, Rhenium, tantalum, beryllium and strontium. For the  Zirconium, Graphite and manganese, import dependence is 80 , 60 and 50 percent respectively (Ministry of Mines: 2025a). Also, technological development for mining and processing of critical minerals is a long-term process and developed countries are not willing to share this technology on easy terms. Critical minerals have assumed the shape of strategic weapons.
2.  Long Gestation Period and Lack of Investment – The mining and processing industry for critical minerals has long gestation period and significant uncertainty; hence private sector is not will to commit significant resources in mining and processing of critical minerals. Because of this reason, the government  of India has failed many times to successfully auction critical minerals to private companies. Since critical mining and manufacturing industry involves investment of huge funds, no breakthrough appears o the horizon as far as investment is concerned. For example, government of India started auction for 15 blocks of critical minerals like Graphite, vanadium, potash etc, but no bids were received for the five blocks and they remained unauctioned till August, 2025 (TOI:2025).  The only way left is that government comes with significant investment in critical mineral sector, instead of relying on private sector investment. Private sector investment is always prone to green pastures with significant profit prospects. And Critical mineral industry does not meet this criterion for now.
3.   Global Supply Chain Disruptions- In the present global order riddled with conflicts, intense commercial and strategic competition and  polarization, trade, minerals and advance technology are no longer public goods to be shared fairly, but have assumed the shape of strategic weapons to score strategic points. Thus, countries like China and the US have weaponized trade and  minerals. While Trump administration has imposed 25 percent punitive tariff against India to punish India for purchasing oil from Russia, China had imposed restriction on supply of rare earth minerals as well as permanent magnets to seek concession in other areas.  China had, for the first-time imposed restriction on critical minerals supply in 2010 against Japan, but India was spared that time. This has made those countries vulnerable to manipulation, which are dependent on global supply of critical minerals. India falls in this category of nations. The global supply chain disruptions are likely to become frequent in feature in coming decades as the need for critical minerals rises with growth in clean technologies and electronics industry. The uneven distribution of critical minerals resources and uncertain global economic prospects further enhance the chances of supply chain disruptions in minerals sectors in future.  Rare earth supply chains have become a tool for weaponization in trade relations. China’s dominance in certain critical technology supply chains, including Rare Earth Elements (REEs), creates uncertainty (Pandey:2025). Hence, there is an urgent need to develop indigenous technologies and capabilities in critical mineral sector. 

The Way Forward

There is no second thought in the point that critical minerals hold the key for future growth of economy and industry as well as clean energy transition.  Even the development of AI, semiconductors, and automation depends upon  the supply and availability of critical minerals. Indian policy makers have realized this point. The prevailing global scenario is characterized by uncertainty and increasing weaponization of global supply chains. So far India has been dependent on the import of critical minerals and their products mainly on China. But now this does not appear assured. Hence India has launched a comprehensive strategy with domestic intervention and global collaboration to ensure the supply of critical minerals. India’s National Critical Mineral Mission  underlines her strategy. Though, India faces significant headwinds like disruption of global supply chains, lack of technology and investment constraints, yet the serious beginning has been made to overcome these challenges. If India seriously and urgently pursues her domestic and global strategy for the security of supply of critical minerals,  India may be able to develop indigenous capabilities to ensure availability of critical minerals.

REFERENCES

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