An exploration of India’s minerals diplomacy

UPSC Syllabus- GS paper 2 – international relations-Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests and GS Paper-3– Infrastructure.

Introduction

India’s clean energy transition and industrial growth depend increasingly on secure access to critical minerals. However, global supply chains are fragile, highly concentrated, and dominated by a few players, especially China. India faces high import dependence, weak processing capacity, and geopolitical risks. In response, India is pursuing a two-pronged strategy that combines domestic capability building with diversified global partnerships to ensure long-term mineral security.

Understanding Critical Minerals

Critical Minerals: Critical minerals are a category of non-fuel minerals and elements which satisfy 2 conditions:

1. Economic development & National Security = Essential for economic development and national security as they are vital for development of materials for defense, aerospace, nuclear, and space applications.
2. Supply chain vulnerability = There are associated risk of supply chain vulnerability and disruption with these minerals, due to their lack of availability, and concentration of existence, extraction or processing of these minerals in few geographical locations.

Major Concerns and Structural Gaps in Critical Minerals

1. Highly concentrated global distribution: At least 55% of each identified critical mineral is located in only 15 countries, making global supply chains fragile and disruption-prone.
2. China’s dominance in mineral supply chains: China controls 55% of global rare earth mining and 85% of refining, with a strong hold over the midstream segment, creating global dependence risks.
3. India High import dependence: India is 100% import-dependent for 10 critical minerals, with 60–80% reliance for several others, exposing it to price and geopolitical shocks.
4. India’s weak processing and manufacturing base: India has upstream mining potential, but midstream processing and downstream manufacturing remain underdeveloped. This forces continued dependence on imported refined minerals and finished components.
5. Processing as the key choke point: The main vulnerability lies not in access to ore but in lack of domestic refining and processing capacity. Without this, India remains exposed even when mining access is secured abroad.
6. Uncertain and uneven global partnerships: Several partnerships have progressed unevenly. Cooperation with the U.S. remains affected by tariffs, shifting trade rules, and policy volatility, while other regions lack institutional depth and long-term frameworks.
7. Domestic governance and implementation gaps: Challenges include bureaucratic delays, inefficient auctioning, reliance on foreign investment, and limited ESG and transparency frameworks. These gaps weaken India’s credibility and effectiveness in global mineral partnerships.

India’s Initiatives on Critical Minerals

1. National Critical Mineral Mission (NCMM): India launched the NCMM in January 2025 with an outlay of ₹34,300 crore over seven years. It aims to secure supply chains, reduce import dependence, and promote self-reliance.
2. Identification of priority minerals: A committee formed by the Ministry of Mines in November 2022 identified 30 critical minerals, with 24included in Part D of Schedule I of Mines and Minerals Development and Regulation Act, 1957 (MMDR Act, 1957). The focus is on boosting domestic production and ensuring long-term availability.
3. Strengthening exploration and research capacity: The Geological Survey of India has been assigned 1,200 exploration projects, including offshore mining. Over the last three years, 368 critical mineral exploration projects have been undertaken.
4. Role of KABIL in overseas assets: Khanij Bidesh India Limited is central to India’s overseas strategy. It supports exploration, asset acquisition, and long-term supply agreements in mineral-rich countries.

An Assessment of India’s Global Partnerships in Critical Minerals

1. Australia as a reliable upstream partner: Australia offers political stability and large reserves. Under the India–Australia Critical Minerals Investment Partnership, five lithium and cobalt projects were identified in 2022 for potential investment.
2. Japan’s institutional and resilience-based model: Japan follows long-term planning through diversification, stockpiling, recycling, and research. Cooperation now extends to joint extraction, processing, and stockpiling, including in third countries.
3. Africa’s resource base and value-creation demand: Agreements with Namibia for lithium, rare earths, and uranium, and talks with Zambia for copper and cobalt, show India’s shift towards Africa. Long-term industrial engagement is necessary to stay competitive.
4. United States as a technology but unstable partner: Cooperation with the U.S. remains limited due to tariffs, shifting trade rules, and incentives under the Inflation Reduction Act. Initiatives such as the Transforming the Relationship Utilizing Strategic Technology (TRUST) and the Strategic Minerals Recovery Initiative propose frameworks for joint work on rare-earth processing, battery recycling, and clean separation technologies, but policy volatility remains a challenge.
5. European Union’s standards-driven approach: The EU’s Critical Raw Materials Act links regulation, sustainability, and industry. India must align with transparency, lifecycle standards, and environmental norms to deepen cooperation.
6. West Asia’s midstream potential: The UAE and Saudi Arabia are investing in refining, battery materials, and green hydrogen. West Asia can serve as a processing hub for minerals sourced elsewhere.
7. Russia as a diversification option: Russia has large reserves of rare earths, cobalt, and lithium. Sanctions, financing issues, and logistics limit reliability, making Russia a hedge rather than a base partner.
8. Latin America and Canada as emerging frontiers: India has expanded engagement with Argentina, Chile, Peru, Brazil, and Canada. KABIL signed a ₹200 crore agreement with Argentina. Competition is intense, and long-term presence needs value-chain integration.

Way Forward

1. Value-chain based partner mapping: India should clearly assign roles across the value chain. Africa, Australia, Canada, and Latin America for upstream extraction; Japan and West Asia for processing; EU and U.S. for downstream technology; and Russia for diversification.
2. Implementation of the recommendations of expert committee on critical minerals: Setting up of the Centre of Excellence for Critical Minerals (CECM) as a dedicated wing in the Ministry of Mines. This can be on the lines of CSIRO which is an Australian government corporate entity. The centre of excellence can collaborate with international agencies or Khanij Bidesh India Ltd (KABIL) for the strategic acquisition of foreign assets of these minerals.
3. Push for expansion of Mineral Security Partnership (MSP): Along with India, more countries in the Global South can be part of the alliance, especially critical mineral-rich African countries. The MSP can become an international platform that reports on the status and future of critical mineral markets.
4. Encourage FDI in domestic mining: Rising Foreign Direct Investment (FDI) will not just support businesses like battery and EV manufacturing. It will also bring the expertise of international mining firms to aid in exploring critical minerals for the country’s benefit.
5. Investment in beneficiation and processing facilities: India should invest in beneficiation and processing facilities in Africa to promote local economies and sustainable relationships.
6. Path to global leadership: India can emulate Indonesia’s success in nickel to become a global leader in these minerals, utilizing access to both domestic and international raw materials.
7. Alignment of mineral incentives: The Production-Linked Incentive (PLI) scheme for minerals should align with global aspirations, creating employment opportunities.

Conclusion

Critical minerals have emerged as a strategic pillar for India’s energy transition, economic security, and geopolitical positioning. While India has initiated strong domestic reforms and built a wide network of partnerships, gaps in processing capacity and governance remain. Sustained focus on implementation, value-chain integration, and stable partnerships will determine India’s long-term mineral security.

Question for practice:

Discuss how India is addressing critical mineral supply vulnerabilities through domestic initiatives and diversified global partnerships.

Source: The Hindu