India stands at the crossroads in its journey towards a green, tech-driven future where critical minerals like lithium, cobalt, and nickel, along with rare earth elements (REE), will play a vital role. Used in everything from solar panels to EVs and washing machines to fighter aircraft, they cannot be replaced. However, India’s near-total import dependence has emerged as a significant strategic concern.

China, which controls 70% of rare earth mining and 90% of refining, has leveraged its dominance. In 2023, on the heels of the US restricting exports of advanced semiconductor chips, China imposed export curbs on gallium, germanium, and graphite citing national security concerns.

More recently, it restricted the supply of rare earth magnets in response to reciprocal tariffs. The resultant disruption to global supply chains was wide-ranging and, along with other steps targeted specifically at India, has raised questions about our industrial resilience. Addressing this will require strengthening domestic capabilities, including achieving technological self-reliance and diversifying global sourcing.

Despite holding the world’s third-largest REE reserve base, India contributes less than 1% to global output because deposits are largely low grade and there is hardly any processing capacity for downstream alloys and magnets. This is set to change dramatically with National Critical Minerals Mission (NCMM), led by the ministry of mines and supported by Geological Survey of India (GSI) and Khanij Bidesh India Limited (KABIL).

Announced earlier this year with an outlay of Rs 34,300 cr ($4 bn), the mission aims to ‘secure long-term sustainable supply of critical minerals and strengthen India’s critical mineral value chains encompassing all stages from mine exploration and mining to beneficiation, processing, and recovery from end-of-life products’. Essentially, it will transform India from a vulnerable importer to a leader in the critical minerals ecosystem.

While GSI has been tasked with conducting 1,200 exploration projects by 2030, UGC has proposed setting up a Centre of Excellence in Mineral Processing, and the Anusandhan National Research Foundation has allocated Rs 1,000 cr to support advanced research.

Additionally, a Rs 1,500 cr scheme launched in June under NCMM will promote a circular economy by supporting initiatives aimed at material recovery, reuse, and recycling. In this context, pilot projects in Telangana have shown potential for extracting scandium and strontium from the overburden of coal mines.

More recently, Quad Critical Minerals Initiative was launched to focus on securing and diversifying supply chains through collaborative efforts in mineral recovery, recycling, sustainable mining, and technology sharing. It also looks to counter non-market practices like export restrictions and encourages private sector engagement through the Quad Business Roundtable.

KABIL has entered into an agreement with CAMYEN, a state-owned enterprise in Argentina, for a lithium exploration and mining project, and the India-Australia Critical Minerals Investment Partnership will pursue lithium and cobalt assets Down Under.

Bilateral agreements have also been signed with Peru, Malawi, Mozambique, and Zambia, among others, and the ministry of mines has initiated the process of entering into G2G MoUs with Brazil and the Dominican Republic.

Further, with a view to amplifying its strategic positioning as a rising economic power, India is also part of multilateral platforms such as the US-led Minerals Security Partnership, Indo-Pacific Economic Framework (IPEF), Initiative on Critical and Emerging Technologies (iCET), and the G7 Critical Minerals Action Plan, which aim to promote innovation and circular economy practices to strengthen the critical minerals value chain.

Thus, there is a concerted effort to leverage the nation’s increasing sphere of influence to underpin economic ambitions. However, recent developments reflect potential hurdles. China’s export curbs on rare earth magnets, of which it controls 80% of global supply, have had a chilling effect on India’s EV industry and can also derail the success achieved in electronics manufacturing. It drew the attention of PMO, which held a high-level review meeting to take stock of the situation and assess the Rs 1,345 cr incentive scheme aimed at bolstering domestic manufacturing of rare earth magnets.

There are limitations on what can be done to significantly alleviate the impact of a continuing curb on exports by China. However, it is a definite call for action to develop indigenous capabilities and become self-reliant.

India’s clean energy ambitions and the renaissance of its manufacturing sector stand on a foundation of minerals it scarcely controls. NCMM is an ambitious roadmap to reduce import dependency by 30–40% by 2035 and, in conjunction with various policy initiatives and trade pacts, $100 bn in economic value stands to be unlocked by 2040. In effect, it is the bedrock of PM Narendra Modi’s vision of Viksit Bharat.

There will be challenges along the way but, if this strategy is executed with speed and at scale, the next decade will see India emerge as an important player globally in critical minerals, thereby securing its economic future while meeting climate commitments.