The government has approved the national critical mineral mission with an outlay of Rs 34,300 crore to boost exploration and trade of these essential items. The scheme, designed to counter China’s dominance in India’s critical mineral imports, will be implemented over seven years to fiscal 2030-31. The mission seeks to increase domestic stockpiles, strengthen trade partnerships with resource-rich nations, and acquire overseas mineral assets. Of the total allocation, the government has earmarked Rs 16,300 crore, while Rs 18,000 crore is expected from public sector undertakings.
The significance of critical minerals cannot be overstated at a time of rapid technological advancement. Minerals such as lithium, cobalt, rare earth elements, and copper are indispensable for high-tech industries, clean energy, and defence. From electric vehicle batteries to semiconductors and solar panels, these minerals power cutting-edge technology, making their availability a strategic priority for the Indian government. Ensuring a stable and secure supply is essential to maintaining India’s technological and economic progress.
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Roadmap for critical minerals security
The critical mineral mission, first announced on July 23, 2024in the Union Budget 2024-25, covers all stages of the value chain, including exploration, mining, beneficiation, processing, and recovery from end-of-life products. The overarching goal is to establish a self-reliant and sustainable critical minerals ecosystem in India.
While domestic exploration will be a priority, offshore resources will also be tapped. The mission includes provisions for fast-tracking approvals for exploration, aided by amendments to the Mines and Minerals (Development and Regulation) Act, 1957, which were introduced in 2023. To accelerate domestic exploration, the government has introduced financial incentives to encourage private investment and promote mineral recovery from overburden and tailings.
So far, the Ministry of Mines has auctioned 24 strategic mineral blocks, while the Geological Survey of India (GSI) has conducted 368 exploration projects over the past three years, with 195 currently ongoing in FY25. The Centre is considering 1,200 additional exploration projects by FY31, involving ministries, PSUs, private enterprises, and research institutions working together to meet the mission’s objectives.
In 2023, the ministry of mines identified 30 critical minerals essential for India’s economic and strategic security. However, a key concern remains India’s heavy dependence on China for critical mineral imports. China commands an unmatched dominance in this sector due to its vast resource base and strategic investments across the entire supply chain. It is the world’s largest mining hub, with reserves of 173 types of minerals, including 13 energy minerals, 59 metallic minerals, and 95 non-metallic minerals.
China’s dominance in critical minerals
China’s refining and processing capabilities are even more formidable. The country controls 87% of global rare earth processing, 58% of global lithium refining, and 68% of global silicon processing. Beyond its natural reserves, China has positioned itself as the world’s leading player in midstream and downstream refining, giving it an outsized influence on global supply chains. Additionally, Beijing has strategically invested in overseas mining assets, making countries like India, the US, and the EU highly vulnerable to supply chain disruptions.
China has increasingly weaponised critical mineral exports, leveraging them as a geopolitical tool in sectors such as semiconductors, battery manufacturing, and high-tech industries. The Indian economy is particularly exposed, as it relies heavily on Chinese imports for several critical minerals. Six minerals, in particular, have a dependency rate exceeding 40%: bismuth (85.6%), lithium (82%), silicon (76%), titanium (50.6%), tellurium (48.8%), and graphite (42.4%). This overreliance puts India in a vulnerable position, especially given the increasing global competition for critical mineral resources.
Challenges in India’s ecosystem
Despite being rich in mineral resources, India’s reliance on imports is driven by structural challenges in its mining and processing ecosystem. Many critical minerals are deep-seated, making their extraction both technologically demanding and financially risky. Without sufficient government support, private sector participation has remained low. Investors are reluctant to commit capital to exploration due to the high risks and long gestation periods. Furthermore, India’s processing capabilities are underdeveloped.
For instance, despite the discovery of 5.9 million tonnes of lithium resources in Jammu & Kashmir, India currently lacks the technology to extract lithium from clay deposits. The absence of an advanced mineral refining infrastructure means that even when minerals are mined domestically, they often need to be sent abroad for processing before they can be used in high-tech applications. This reduces India’s ability to develop a fully self-sufficient supply chain for critical minerals.
Strengthening India’s minerals security
The national critical mineral mission is expected to address these challenges by boosting domestic exploration and securing overseas assets. To strengthen its access to global mineral reserves, the government has established KABIL (Khanij Bidesh India Ltd), a joint venture of three state-owned firms, to secure overseas mineral assets.
Beyond KABIL, India has joined strategic global initiatives, such as the Minerals Security Partnership (MSP) and the Critical Raw Materials (CRM) Club. These initiatives aim to diversify India’s supply sources, reduce dependency on China, and foster collaborations with like-minded countries that share India’s concerns about mineral security.
To further mitigate risks, India is exploring multiple avenues to reduce its reliance on virgin mineral imports. Research and development efforts, led by institutions such as the Geological Survey of India (GSI) and the Council for Scientific and Industrial Research (CSIR), are focused on developing efficient mineral extraction and processing techniques. Additionally, the government is actively promoting recycling and circular economy initiatives, aiming to recover critical minerals from electronic waste and other secondary sources.
There is also growing interest in introducing production-linked incentives (PLIs) for mineral recycling, which could encourage private sector participation in sustainable mineral recovery. By investing in domestic refining and recycling, India hopes to gradually reduce its dependence on imported raw materials and build a resilient supply chain for critical minerals.
The success of these initiatives will take time to materialise, but the national critical mineral mission marks a crucial step towards securing India’s future in clean energy, defence, and high-tech manufacturing. By boosting domestic exploration, reducing import dependence, and fostering strategic global partnerships, India is positioning itself for greater resilience in the global mineral supply chain. While challenges remain, the government’s proactive steps indicate a strong commitment to building a self-reliant and competitive critical minerals ecosystem.