India’s Minerals Diplomacy
Kartavya Desk Staff
Source: TH
Subject: International relations/ Economic Resources
Context: India is recalibrating its global mineral strategy following the launch of the National Critical Mineral Mission (NCMM) in 2025 and the tightening of export controls by China on rare earths.
About India’s Minerals Diplomacy:
What it is?
• Minerals diplomacy is the strategic use of international partnerships and multilateral mineral clubs to secure a reliable supply of minerals like Lithium and Cobalt.
• It involves managing upstream mining, midstream processing, and downstream manufacturing collaborations to protect national economic growth and security.
Status of Mineral Resources:
• Refining Growth: Domestic refined copper production surged by 43.5 percent in early FY26, signalling a major rebound in local smelting capacity.
• Import Reliance: India remains 100 percent import-dependent for 10 critical minerals, including Lithium and Cobalt, which are vital for EV batteries.
• Global Standing: India is currently the 2nd largest producer of aluminium and the 3rd largest iron ore producer globally as of 2025.
• Exploration Surge: The Geological Survey of India has undertaken over 368 critical mineral exploration projects in the last three years to bridge gaps.
• Financial Outlay: The government has allocated a sovereign fund of 34,300 crore rupees for the National Critical Mineral Mission through 2031.
Need for India’s Mineral Diplomacy:
• Energy Transition Goals: India needs vast lithium for its 500 GW non-fossil fuel target. The India-Australia Partnership (2022) identified five projects to secure lithium for EVs.
• Mitigating China Risk: To bypass China dominance in processing. The 2025 India-Japan Memorandum focuses on joint extraction in third countries to build a China-plus-one supply chain.
• Technological Sovereignty: Accessing advanced refining and recycling technologies. The TRUST Initiative with the USA proposes frameworks for rare-earth processing and battery recycling technologies.
• Economic Resilience: Ensuring stable prices against global volatility. India’s 200 crore agreement with Argentina via KABIL aims to fix long-term costs for domestic battery manufacturers.
• Global South Leadership: Positioning India as a bridge for mineral-rich nations. Recent deals with Namibia for Lithium focus on local value creation, contrasting with extractive models.
Initiatives Taken:
• National Critical Mineral Mission (NCMM) 2025: A 7-year, 34,300 crore mission for end-to-end supply chain security and exploration.
• Mines and Minerals (Amendment) Act 2025: Exclusive authority to the Centre to auction mining leases for 24 strategic and critical minerals.
• KABIL (Khanij Bidesh India Ltd): A joint venture of PSUs specifically for acquiring overseas mineral assets in Chile and Argentina.
• Mineral Security Partnership (MSP): India joined this 14-nation club to coordinate with the US and EU on sustainable global supply chains.
• Recycling Incentive Scheme: A 1,500 crore scheme launched in 2025 to build a circular economy for critical minerals from e-waste.
Challenges Associated:
• Processing Choke Points: India finds ore but lacks high-tech refineries. Most lithium from KABIL Argentina projects still needs foreign refining due to weak midstream capacity.
• Intense Global Competition: Competing with deep pockets of Chinese firms. India asset-acquisition talks in Zambia face hurdles from more coordinated financial bids by global giants.
• Policy Volatility in Partner Nations: Resource Nationalism complicates friend-shoring. US Inflation Reduction Act subsidies often favour local North American production over Indian exports.
• Environmental and Social Concerns: Difficulty in meeting strict EU environmental standards. To export to Europe, Indian mining must align with transparency norms that are still maturing.
• Long Lead Times: Mining projects take 10 to 15 years from discovery to production. Despite identifying lithium in Jammu and Kashmir, commercial extraction is years away due to terrain.
Way Ahead:
• Integrated Value-Chain Mapping: Assigning specific roles to partners. Finalizing the trilateral agreement with Australia and Canada will combine raw reserves with India manufacturing scale.
• Sovereign Wealth Support: Using NCMM funds to de-risk private sector entry. The proposed Critical Minerals Overseas Acquisition Authority can provide the patient capital needed for long-term projects.
• Focus on Circular Economy: Investing in urban mining for e-waste. Scaling the 1,500 crore recycling scheme can recover 40 kilo tonnes of minerals annually by 2030.
• Strengthening ESG Standards: Adopting global reporting codes. Linking Indian mines to the Indian Mineral Industry Code ensures credibility and attracts vital Western investment.
• Diplomatic Expansion: Creating a dedicated Mineral Diplomacy Division. Appointing Mineral Attachés in capitals like Perth and Santiago will help monitor local developments in real-time.
Conclusion:
India’s minerals diplomacy has evolved from a reactive trade policy into a sophisticated, two-pronged geopolitical strategy to secure raw materials. By balancing domestic exploration with strategic global clusters, India is ensuring the foundation for its 2047 Viksit Bharat vision. Success depends on turning signed agreements into operational refineries and stable, long-term supply lines.
Q. While global competition for critical minerals intensifies, India has lagged in developing a resilient supply chain. Analyze the role of National Critical Mineral Mission (NCMM) in strengthening India’s critical mineral security. (10 M)