Critical Minerals Strategy: India's Geopolitical and Economic Imperative

The Hindu - Opinion · 4 Aug 2026 · 2 min read
Prelims · Economy Mains · GS3 Economy High relevance

Critical minerals like lithium, cobalt, and rare earths are becoming central to India's energy transition and strategic autonomy, with global supply chains dominated by China creating vulnerabilities that require urgent policy action.

Key points

Critical minerals including lithium, cobalt, nickel, graphite, copper and rare earth elements are essential for electric vehicles, renewable energy, semiconductors, and defence technologies, making them strategically vital for India's industrial and clean energy goals.

Global supply chains are highly concentrated, with China controlling 70% of refining capacity for 19 out of 20 strategic minerals, creating geopolitical risks as seen in its 2025 rare earth export controls that impacted multiple industries worldwide.

[GS3-Economy] The EU's Critical Raw Materials Act and US supply chain diversification efforts highlight how major economies are securing mineral access through domestic benchmarks (10% extraction, 40% processing by 2030) and strategic partnerships, models India could adapt.

India's net-zero pathway requires 169 million tonnes of critical minerals by 2070, with copper demand rising for power systems and rare earths for wind energy, but domestic processing gaps leave it dependent on imports for lithium, cobalt, nickel, and high-purity products.

Despite having significant reserves (44.9 million tonnes cobalt, 211.6 million tonnes graphite), India lacks refining capacity, with China processing 90% of global rare earths and 70% of lithium chemicals, exposing strategic vulnerabilities.

[GS2-Governance] The National Critical Mineral Mission aims for 1,200 exploration projects by 2030-31, 15 mineral productions, and 50 overseas acquisitions, while KABIL's Argentina lithium deal (15,703 hectares) and proposed rare earth corridors show initial steps toward supply security.

Structural challenges include shallow exploration, slow clearances, limited private participation, and processing bottlenecks in smelting and purification, compounded by recycling limitations that can only meet 25% of copper/graphite demand by 2050.

The India-US critical minerals framework (May 2026) provides diplomatic leverage, but execution requires processing infrastructure, private investment incentives, strategic stockpiles, and R&D partnerships to build domestic capability.

Way Forward: India should establish mineral-specific risk thresholds, accelerate processing infrastructure with tax incentives, operationalize strategic reserves, diversify overseas assets through KABIL, and integrate recycling into supply chains via extended producer responsibility mandates.

Key terms

Khanij Bidesh India Limited (KABIL)

Joint venture (NALCO, HCL, MECL) for overseas critical mineral acquisitions, like Argentina's lithium blocks. Illustrates India's geopolitical resource diplomacy and public sector's role in strategic sectors (GS2/GS3).

Rare Earth Elements

17 metals crucial for magnets, electronics, and defence tech. China's 90% processing dominance makes them geopolitically sensitive, relevant for GS2 IR (supply chain resilience) and GS3 (clean tech manufacturing).

Critical Minerals

Minerals essential for economic and national security with high supply chain risks, including lithium, cobalt, rare earths. For UPSC, their strategic importance spans GS3 (energy security), GS2 (international partnerships), and governance challenges in mineral policy.

National Critical Mineral Mission

India's 2023 initiative to secure mineral supply chains through exploration (1,200 projects by 2030), domestic production (15 minerals), and overseas acquisitions (50 assets). Relevant for GS3 resource management and GS2's policy coordination questions.