[Answered] “China’s dominance in the global critical minerals supply chain poses strategic and economic challenges for India. Discuss the need for India to secure its supply of critical minerals and suggest policy measures to reduce dependency on China.”

China’s dominance in the global critical minerals supply chain, backed by its Belt and Road Initiative (BRI), poses significant strategic and economic challenges for India.

Need for India to Secure Its Critical Minerals Supply

• Strategic Vulnerabilities and Geopolitical Risks: China’s control over lithium, cobalt, and rare earth elements (REEs) gives it leverage over India’s green energy and defense industries. Chinese firms acquire global mines through state-backed loans and joint ventures (JVs), ensuring supply chains remain under Beijing’s control.
• Energy Transition and Manufacturing Goals: India’s National Electric Mobility Mission and Renewable Energy Targets (500 GW by 2030) require stable access to lithium and REEs. Without a secure supply, India risks dependence on Chinese firms for solar panels, wind turbines, and electric vehicle (EV) batteries.
• Economic Self-Reliance and Industrial Growth: China’s financing model, which involves subsidized loans and state-backed investments, enables it to dominate mining in Africa and Latin America. India’s National Critical Minerals Mission remains in its early stages, making strategic acquisitions crucial to securing long-term resource security.

Policy Measures to Reduce Dependency on China

• Strengthening Global Partnerships: India should leverage the Quad (U.S., Japan, Australia, India) for joint ventures in Australia and Africa, ensuring diversified mineral sourcing. Partner with resource-rich nations like Chile, Brazil, and Zimbabwe, offering technology transfers and sustainable mining models to counter China’s control.
• Boosting Domestic Exploration and Mining: Expedite mining in Rajasthan (lithium), Odisha (REEs), and Karnataka (nickel, cobalt). Strengthen Khanij Bidesh India Ltd. (KABIL) to compete with China’s $56.9 billion BRI-backed mineral acquisitions.
• Developing Refining and Processing Infrastructure: India currently lacks significant domestic processing capabilities—even when raw materials are sourced from abroad, refining often happens in China. Government incentives should encourage public-private partnerships in mineral refining, reducing reliance on Chinese processing plants.
• Strategic Investment in Overseas Mining: Indian firms, such as Coal India and ONGC Videsh, should expand investments in Latin American lithium mines and African cobalt reserves. Establish sovereign-backed mining funds to finance acquisitions, reducing dependence on commercial lending.
• Leveraging Recycling and Circular Economy: Develop urban mining to extract lithium and rare earths from e-waste and used EV batteries. Invest in battery recycling technologies to reduce fresh mineral demand and enhance self-sufficiency.

Conclusion

To reduce dependency on China, India must diversify mineral imports, enhance domestic production, and expand refining infrastructure. Strengthening Quad partnerships, South-South cooperation, and the National Critical Minerals Mission will help India secure its critical minerals supply and maintain strategic autonomy in emerging industries.