The Economic Survey of 2023-24 highlighted India’s significant reliance on China for critical minerals as a critical vulnerability. To address this, the Indian government introduced the Critical Mineral Mission, as announced by the Finance Minister in the 2024 Budget speech. The mission focuses on domestic production, recycling, and overseas acquisition, emphasizing the need for a diversified supply chain to support India’s ambitions in renewable energy and electric vehicles.
China’s control over critical minerals has become more evident amidst the economic skirmishes with the United States. The imposed restrictions by China on exports of minerals like gallium, germanium, and graphite, crucial for various technology sectors including renewables and EVs, exemplify the strategic use of these resources as an economic lever. India, heavily dependent on imports from China for lithium, graphite, cobalt, nickel, and copper, finds itself in a precarious position with 70 to 80 percent of its lithium and lithium-ion imports coming from China.
India’s strategy to reduce its dependency includes strengthening domestic mining capabilities and securing foreign assets. Notably, India’s Khanij Bidesh India Ltd. (KABIL) has been proactive in securing critical minerals from global sources. In January 2024, KABIL signed a significant agreement with Argentina for the exploration and potential commercial production of lithium, marking a crucial step in reducing dependency on Chinese imports. Argentina, with its vast lithium reserves, plays a key role in India’s strategy to diversify its mineral sources. This partnership aims to facilitate the establishment of a reliable supply chain that can support India’s burgeoning battery and EV industries.
The global race for critical minerals is intensifying, with countries recognizing the strategic importance of these resources in the green energy transition. The US-led Mineral Security Partnership, which India joined in June 2023, seeks to address the challenges posed by China’s near-monopoly. This partnership focuses on diversifying global supply chains and promoting sustainable mining practices. However, the journey to self-reliance is fraught with challenges, including technological constraints and the need for significant investment in domestic capabilities.
The Government of India’s future plans include reducing import duties on critical minerals and enhancing domestic processing and refining capacities. The establishment of a Centre of Excellence for Critical Minerals (CECM) is proposed to spearhead India’s strategic efforts in securing these essential materials. The government’s holistic approach to developing both domestic and international sources is crucial for securing the minerals needed for India’s clean energy future.
India’s Critical Mineral Mission is a strategic imperative, aimed at securing the nation’s needs for critical minerals amidst global supply uncertainties. While strategic partnerships like the one with Argentina are steps in the right direction, the success of these initiatives will depend on a coordinated approach that includes technological advancements, policy support, and international cooperation. India’s proactive stance on securing a diversified and stable mineral supply chain is pivotal in its quest for energy security and economic sovereignty.
“As nations strive for technological and environmental advancements, securing a diversified supply chain is not merely an economic strategy but a cornerstone of national security.” – Insightful for future leaders in policy and governance.
Kutos : AI Assistant!
