The ‘critical factor’ in India’s clean energy ambitions

Source: The post “The ‘critical factor’ in India’s clean energy ambitions has been created, based on “The ‘critical factor’ in India’s clean energy ambitions” published in “The Hindu” on 16 October 2025. The ‘critical factor’ in India’s clean energy ambitions.

UPSC Syllabus: GS Paper 3 – Indian Economy

Context: India’s aspiration to become a global leader in clean energy and sustainable growth depends heavily on the availability of critical minerals such as lithium, cobalt, and rare earth elements (REEs). These minerals are vital for technologies like electric vehicles (EVs), solar panels, wind turbines, and energy storage systems, forming the backbone of India’s energy transition and net-zero ambitions by 2070.

Importance of Critical Minerals in India’s Clean Energy Transition

1. Critical minerals form the backbone of clean technologies, enabling electric mobility, renewable energy generation, and efficient storage solutions.
2. India’s target of achieving 500 GW of renewable energy capacity by 2030 requires a steady and secure supply of these minerals.
3. Lithium and cobalt are vital for EV batteries, while rare earths are used in wind turbines, solar panels, and electronic components.
4. India’s EV market is projected to grow at a compound annual growth rate (CAGR) of 49% from 2023 to 2030, supported by government initiatives like the Electric Mobility Promotion Scheme (EMPS) 2024.
5. In 2023, the battery storage market in India was valued at $2.8 billion, and it is expected to expand rapidly as renewable adoption accelerates.
6. These minerals are thus indispensable to India’s long-term clean energy goals and industrial competitiveness.

Challenges

1. Import Dependence: India is heavily dependent on imports, sourcing nearly 100% of lithium and cobalt and over 90% of REEs from other countries.A large share of global production and processing is concentrated in China, which controls 60% of global REE output and 85% of refining capacity, creating strategic vulnerabilities.
2. Limited Domestic Mining: Domestic mining of critical minerals remains limited, even though India has 5.9 million tonnes of inferred lithium reserves identified by the Geological Survey of India (GSI) in Jammu and Kashmir.
3. High Extraction Costs: Extraction and processing costs in India are significantly higher compared to countries like Australia, reducing commercial viability.
4. Environmental Concerns: Mining projects often face environmental concerns, regulatory hurdles, and infrastructure gaps, slowing development.
5. Low Recycling Rate: India also faces a low recycling rate, with only 10% of the 4 million tonnes of e-waste recycled annually, leading to loss of valuable minerals

Government Initiatives

1. Policy and Institutional Framework

1. The National Mineral Exploration Policy (NMEP), 2016 promotes private sector participation in mineral exploration to accelerate the discovery and mapping of critical mineral resources in India.
2. The Mines and Minerals (Development and Regulation) Act, 2021 enables the commercial auction of critical mineral blocks, allowing both domestic and international companies to participate in exploration and mining activities.
3. The National Mineral Policy, 2019 focuses on ensuring sustainability, environmental responsibility, and improving the ease of doing business in the mining sector.
4. The proposed National Critical Mineral Mission aims to coordinate exploration, processing, and recycling efforts to build an integrated and resilient supply chain for critical minerals.

2. Domestic Exploration and Production

1. The Geological Survey of India (GSI) has discovered 5.9 million tonnes of inferred lithium reserves in Jammu and Kashmir, marking a significant step toward domestic resource development.
2. The government has conducted auctions for critical minerals such as lithium and rare earth elements (REEs), which have attracted bids from both domestic firms and multinational corporations eager to invest in India’s mineral sector.

3. Strengthening Public Sector and Global Partnerships

1. IREL (India) Limited, formerly known as Indian Rare Earths Ltd, is engaged in extracting monazite-derived rare earth elements such as neodymium, praseodymium, and dysprosium, which are vital for clean-energy technologies.
2. KABIL (Khanij Bidesh India Limited), established in 2019, was created to secure overseas mineral assets through joint ventures and acquisitions, ensuring a stable and diversified supply of critical minerals for India.

4. Circular Economy and Recycling

1. The E-Waste (Management) Rules, 2022 have been strengthened to promote domestic recycling and recovery mechanisms, enabling better extraction of valuable minerals from discarded electronic products.
2. The Battery Waste Management Rules, 2022 set specific recycling and collection targets for used batteries, particularly those used in electric vehicles and energy storage systems.
3. The government has encouraged public–private partnerships (PPPs) to establish automated recycling plants and mechanised e-waste management facilities, aiming to create a modern circular economy that reduces waste and recovers critical resources efficiently.

Way Forward

1. India must operationalise the National Critical Mineral Mission with clear objectives, dedicated funding, and coordination between ministries.
2. Private investments should be encouraged through tax incentives, subsidies, and ease of doing business reforms in exploration and processing.
3. The government should enhance R&D in advanced extraction, green mining, and mineral recycling technologies.
4. Strengthening international partnerships for mineral imports can diversify supply sources and reduce strategic dependence.
5. India must build a robust recycling and waste management infrastructure to recover minerals domestically.
6. A comprehensive circular economy policy should be implemented to integrate mining, manufacturing, and recycling under one ecosystem.

Conclusion: Critical minerals are the lifeblood of India’s clean energy transition. Securing their supply through domestic mining, strategic global tie-ups, and a robust circular economy will be crucial for achieving energy independence, economic growth, and climate resilience. With the right policy execution, India can transform its critical mineral ecosystem into a pillar supporting its Atmanirbhar Bharat and net-zero 2070 goals.