As the 21st century is increasingly defined by technology-driven advancements, critical minerals have emerged as one of the most significant geo economic assets. India, while a global powerhouse in technology and innovation, faces pressing challenges related to the supply chain and strategic acquisition of these critical minerals, which are essential for clean energy transition, national security, and economic development.
Critical minerals are resources essential for the development of advanced technologies, national security, and overall economic stability. Their importance stems from their role in modern manufacturing processes, including the production of electronics, electric vehicles (EVs), and renewable energy systems. However, the term "critical" also implies the vulnerability of these minerals due to:
Geographic concentration: Many critical minerals are found in a few regions globally, creating strategic vulnerabilities for countries dependent on them.
Difficult extraction: Some of these minerals are difficult or expensive to extract, making supply chains susceptible to disruption.
Complex processing: The refinement and conversion processes for many of these minerals are highly specialized, with a dominance of China in processing (over 90% of rare earth elements, 70% of cobalt, and 60% of lithium).
India’s dependency on imports for critical minerals is a significant challenge, as it has very limited domestic reserves of key resources like lithium, cobalt, and rare earths. This vulnerability not only hampers India’s industrial growth but also puts its national security at risk.
100% Import Dependence: India is completely reliant on imports for refining crucial minerals such as lithium, cobalt, and rare earth elements, which are indispensable for sectors like electric vehicle (EV) production, semiconductors, and defense equipment.
National Critical Mineral Mission (NCMM): To reduce this dependency, India launched the National Critical Mineral Mission (NCMM). This mission is focused on:
Identifying 30 critical minerals essential for national security, technological advancement, and economic development.
Fostering domestic exploration, with an expansion of projects and auctions for mining blocks to secure a consistent supply of these minerals.
Facilitating the transition to clean energy by sourcing minerals for solar panels, wind turbines, and electric vehicle batteries.
While India has taken significant strides toward securing its mineral supply chains, several challenges continue to hinder progress:
Refining and Processing Gap:
India remains 100% dependent on imports for the refining of critical minerals, including lithium and rare earths.
Midstream bottlenecks—such as the lack of sufficient refining and processing capacity—are serious obstacles for the country in securing a stable supply chain.
Strategic Risks and Vulnerabilities:
China’s export restrictions on rare earths have already affected India’s automotive industry, highlighting the strategic vulnerabilities that India faces by relying on global supply chains for critical minerals.
Key industries, especially EV production and defense manufacturing, are heavily reliant on the uninterrupted supply of rare earth elements, making supply security a top priority.
High Capital Costs:
Investment in refining and processing infrastructure requires substantial capital, and the country’s current processing capacity remains limited, reducing India’s ability to secure its mineral needs independently.
Limited Qualified Bidders:
India faces a shortage of qualified bidders for mineral exploration and processing projects, especially in tribal belts and ecologically sensitive zones, where critical minerals like lithium and cobalt are found.
India’s long-term strategy for securing critical minerals requires a multi-pronged approach:
Establish Dedicated Mineral Processing Zones:
India should create dedicated zones with modern infrastructure to refine and process critical minerals. This will help address the processing gap and create a more robust domestic supply chain.
Incentivize Investment with PLI Schemes:
The Production-Linked Incentive (PLI) scheme should be expanded to attract private investment in mineral processing, thereby promoting technological innovation and efficiency in supply chains.
Develop a Stockpiling Framework:
Stockpiling critical minerals is an essential step to buffer against supply shocks and geopolitical tensions. By maintaining strategic reserves, India can protect its industries from disruptions in global supply chains.
Focus on ESG (Environmental, Social, and Governance) Compliance:
India must implement robust ESG frameworks to ensure that its mining and processing operations are sustainable and ethical. This includes:
Third-party audits
Environmental assessments
Community benefit-sharing to avoid exploitation of local populations, particularly in tribal and ecologically sensitive areas.
Promote Circular Economy and Recycling:
To reduce import dependency, India must shift towards a circular economy for critical minerals. This involves:
Strengthening the formal recycling systems for batteries, electronics, and other mineral-dependent products.
Creating incentives for recyclers to encourage the collection and processing of used minerals, including the dismantling and recovery infrastructure for end-of-life products.
Technological Foresight and Dynamic Policy:
India needs to adopt technological foresight to anticipate future mineral needs and address the evolving requirements of clean energy technologies and advanced defense systems. Additionally, policies must be dynamic, with ongoing assessments of global demand-supply and the evolution of new technologies that depend on critical minerals.
To further mitigate risks and secure critical minerals, India must strengthen international partnerships and leverage geopolitical platforms:
Joining the Mineral Security Partnership:
India has already started engaging in international collaborations like the Mineral Security Partnership to promote transparency, ethical sourcing, and secure mineral supply chains.
Bilateral Ties and Trade Agreements:
Building bilateral partnerships with mineral-rich countries such as Australia, Argentina, and African nations can provide alternative sources for critical minerals, reducing reliance on countries like China.
Leveraging Multilateral Platforms (QUAD, G20):
Geopolitical platforms such as the QUAD and G20 offer opportunities for best-practice sharing, joint ventures, and secure supply chain diversification. These forums can be leveraged to build a more resilient and diversified critical mineral network for India.
India’s success in ensuring a steady supply of critical minerals is closely tied to its ambitions in clean energy leadership, technological sovereignty, and national security. The roadmap ahead requires:
Timely Execution of Policies:
The National Critical Mineral Mission and related initiatives must be executed on time, ensuring the infrastructure and systems required for sustainable sourcing and processing are established.
Institutional Support:
Institutional frameworks must be strengthened to support the effective implementation of policies, ensuring transparency, accountability, and strategic foresight.
Strategic Alignment with Foreign Policy:
India’s foreign policy should be aligned with its critical mineral strategy, focusing on long-term alliances, resource security, and technological innovation. By expanding its international partnerships and strengthening domestic infrastructure, India can effectively secure its future in a mineral-dependent global economy.
As the world enters the age of clean energy and advanced technologies, critical minerals have become a geoeconomic imperative. India’s ability to secure and manage these minerals will determine its role in the global economy. By focusing on domestic resource development, sustainable practices, and global alliances, India can navigate the challenges and seize the opportunities that lie in this emerging critical minerals race.
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We provide offline, online and recorded lectures in the same amount.
Every aspirant is unique and the mentoring is customised according to the strengths and weaknesses of the aspirant.
In every Lecture. Director Sir will provide conceptual understanding with around 800 Mindmaps.
We provide you the best and Comprehensive content which comes directly or indirectly in UPSC Exam.