India’s Minerals Diplomacy

Context

In 2025, India launched the National Critical Mineral Mission (NCMM) to recalibrate its global mineral strategy. This move follows tightening export controls by China on rare earths and aims to secure India's supply chain for the green energy transition and high-tech manufacturing.

About India’s Minerals Diplomacy

Definition: Minerals diplomacy is the strategic use of international partnerships and multilateral mineral clubs (like the Mineral Security Partnership) to secure a reliable supply of minerals such as Lithium and Cobalt. It integrates upstream mining, midstream processing, and downstream manufacturing collaborations to ensure national economic security.

Status of Mineral Resources:

Refining Growth: Domestic refined copper production surged by 43.5% in early FY26, indicating a rebound in local smelting capacity.
Import Reliance: India remains 100% import-dependent for 10 critical minerals, including Lithium and Cobalt, essential for EV batteries.
Global Standing: As of 2025, India is the 2nd largest producer of aluminium and the 3rd largest iron ore producer globally.
Exploration Surge: The Geological Survey of India (GSI) has undertaken over 368 critical mineral exploration projects in the last three years.
Financial Outlay: A sovereign fund of ₹34,300 crore has been allocated for the NCMM through 2031.

Need for India’s Mineral Diplomacy

Energy Transition Goals: Securing vast lithium reserves to meet the 500 GW non-fossil fuel target.
Mitigating China Risk: Creating a "China-plus-one" supply chain. The 2025 India-Japan Memorandum focuses on joint extraction in third countries to bypass Chinese processing dominance.
Technological Sovereignty: Accessing refining technologies through initiatives like the TRUST Initiative (USA) for rare-earth processing and battery recycling.
Economic Resilience: Managing global price volatility. India's ₹200 crore agreement with Argentina via KABIL aims to fix long-term costs for domestic battery makers.
Global South Leadership: Positioning India as a partner for mineral-rich nations. Recent deals with Namibia focus on local value creation rather than just extraction.

Initiatives Taken

National Critical Mineral Mission (NCMM) 2025: A 7-year, ₹34,300 crore mission for end-to-end supply chain security.
Mines and Minerals (Amendment) Act 2025: Grants the Central Government exclusive authority to auction mining leases for 24 strategic and critical minerals.
KABIL (Khanij Bidesh India Ltd): A PSU joint venture focused on acquiring overseas assets in the "Lithium Triangle" (Argentina and Chile).
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 promote "urban mining" from e-waste.

Challenges Associated

Processing Choke Points: India often finds ore but lacks high-tech refineries, forcing reliance on foreign midstream capacity.
Intense Global Competition: Competing with the deep pockets of Chinese firms, especially in resource-rich African nations like Zambia.
Policy Volatility: "Resource Nationalism" and foreign subsidies (e.g., the US Inflation Reduction Act) can complicate "friend-shoring" efforts.
Environmental and Social Concerns: Aligning Indian mining with strict EU environmental standards and global ESG transparency norms.
Long Lead Times: Mining projects typically take 10 to 15 years from discovery to production.

Way Forward

Integrated Value-Chain Mapping: Finalizing trilateral agreements (e.g., with Australia and Canada) to link raw reserves with Indian manufacturing scale.
Sovereign Wealth Support: Using NCMM funds to de-risk private sector entry via a proposed Critical Minerals Overseas Acquisition Authority.
Focus on Circular Economy: Scaling the recycling scheme to recover 40 kilo tonnes of minerals annually by 2030.
Strengthening ESG Standards: Adopting the Indian Mineral Industry Code to attract Western investment.
Diplomatic Expansion: Creating a dedicated Mineral Diplomacy Division and appointing Mineral Attachés in strategic hubs like Perth and Santiago.

Conclusion

India’s minerals diplomacy has transitioned from reactive trade to a sophisticated geopolitical strategy. By balancing domestic exploration with strategic global clusters, India is laying the foundation for its 2047 Viksit Bharat vision. Success hinges on converting signed MoUs into operational refineries and stable supply lines.

India’s Minerals Diplomacy