India Must Secure Critical Minerals for Clean Energy

Source: The post India Must Secure Critical Minerals for Clean Energy has been created, based on the article “India Must Secure Critical Minerals for Clean Energy” published in “Business Standard ” on 3 June 2025. India Must Secure Critical Minerals for Clean Energy.

UPSC Syllabus Topic: GS Paper2- International Relations-Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

Context: The recent Chinese restrictions on rare earth magnet exports have exposed India’s deep reliance on mineral imports. This disruption threatens the EV and clean energy sectors, prompting urgent calls for policy shifts in exploration, mining, and processing of critical minerals.

For detailed information on Critical Mineral Mission of India- Significance and Challenges read this article here

Dependence on Chinese Exports

1. Rare Earth Magnet Shortages: China’s April 4 export curbs have left Indian EV makers scrambling, with inventories depleting. Industry delegations are now trying to negotiate with China while seeking assistance from India’s commerce ministry.
2. Overdependence on Imports: India depends heavily on imported rare earth elements (REEs), despite needing only small amounts. These are essential for green energy, electronics, and defence technology.
3. Wider Supply Chain Risks: India also imports other critical minerals like lithium, cobalt, nickel, and graphite. Supply disruptions in any of these threaten clean energy plans and electric mobility targets.

Structural Weaknesses in India’s Mineral Sector

1. Neglect of Exploration and Mining: Despite having domestic reserves, India has failed to develop them. Bureaucratic hurdles and slow government action have impeded large-scale mineral exploration.
2. Absence of Processing Capacity: India lacks capacity in processing key minerals like lithium, graphite, and REEs. Without these facilities, the country remains dependent on external suppliers for refined products.
3. Policy and Institutional Gaps: Over-reliance on public sector companies and poorly designed auction models have discouraged private and global investments in mineral exploration and mining.

Global Competition and China’s Dominance

1. China’s Supply Chain Control: China leads in both mining and processing of REEs, cobalt, lithium, and graphite. It controls major mines in countries like the Democratic Republic of Congo and has built massive refining capacity.
2. Slow Global Response: While countries like the US, UK, EU, and India have recognized their dependence on China, meaningful action to diversify supply chains is only now beginning.
3. India’s Comparative Potential: India holds significant cobalt and REE reserves. Lithium reserves are limited, but global alternatives exist in countries like Australia, Argentina, and the US — yet China dominates due to its processing scale.

Urgent Need for Domestic Capacity Building

1. Accelerated Exploration Needed: Recent announcements suggest intent to fast-track exploration, but progress remains slow. A complete overhaul of India’s approach is necessary.
2. Processing as a Strategic Priority: Without domestic processing, self-reliance is impossible. India must design production-linked incentives (PLIs) to attract investment, despite environmental concerns.
3. Widening the Focus: Beyond current critical minerals, India should also prioritize thorium and natural hydrogen, both of which offer strategic energy potential. Thorium can revolutionize nuclear energy, and India has strong reserves.

Conclusion

India must overcome its inertia in mineral policy. It needs faster exploration, private sector participation, and strong incentives for domestic processing. Without these, India’s clean energy ambitions will remain at the mercy of geopolitical pressures.

Question for practice:

Discuss how India’s dependence on critical mineral imports impacts its clean energy and electric vehicle ambitions.