India faces acute vulnerabilities in critical minerals sector: Report

India's critical minerals sector faces vulnerabilities due to import dependence and limited reserves. A report urges partnerships, especially in the Global South, for secure access and value chain development.

India faces acute vulnerabilities when it comes to critical minerals with limited domestic reserves, high import dependence (particularly on China, which supplies over half of India’s imports), and an underdeveloped processing and refining sector, a new report titled “‘Partnerships for Self-Reliance: Internationalising India’s Critical Minerals Sector,” by the Centre for Social and Economic Progress has cautioned.

India faces acute vulnerabilities in critical minerals sector: Report

The authors have recommended that India prioritise Global South partnerships to secure upstream access and co-develop value chains, particularly in Africa and Latin America. They have also suggested that India serve as a bridge -- linking Global North partners’ technology and finance with Global South resources.

The report has mapped India’s bilateral, multilateral, and minilateral initiatives and found they vary widely in scope and maturity, ranging from early-stage memoranda of understanding to operational joint ventures. Most partnerships are nascent or developing. Only a few—most notably with Australia and Japan— are operational, delivering concrete access to upstream resources and technology. Bilateral deals (e.g., with Australia, Argentina, Chile, and Mongolia) provide targeted resource access; minilateral platforms such as the Quad and Minerals Security Partnership (MSP) enable policy coordination; while multilateral forums (G20, International Energy Agency [IEA], and UN) remain largely principle-setting.

HT reported on November 10 that access to critical minerals has emerged as a key factor in India’s pursuit of its long-term net zero emissions goal, prompting the country to sign agreements with resource-rich nations including Australia, Argentina and Chile for mining, exploration and investment, whilst launching a ₹34,300 crore (approximately $4 billion) National Critical Mineral Mission (NCMM) to secure supplies amid China’s tightening control over global reserves and processing.

Critical minerals such as lithium, cobalt, nickel and rare earth elements are indispensable for solar panels, wind turbines, electric vehicle batteries and other clean energy technologies essential to India’s climate goals. However, China’s grip on both mining and refining—it processes almost 90% of the world’s rare earth elements despite mining only half—has created a strategic vulnerability for countries pursuing energy transitions. With global demand for these minerals expected to more than double by 2030, India faces the twin challenge of securing access to geographically concentrated resources whilst navigating intense US-China competition over supply chains.

Further, the CSEP report has said despite high import dependence, India has avoided cooperation with Beijing, seeking instead to hedge risks through diversification.Further, many Memorandum of Understandings (MoUs) exist, but few translate into projects that strengthen domestic value chains.

India’s policymaking architecture for critical minerals is still evolving. NCMM provides a broad framework, but coordination remains fragmented , leading to overlaps and weak coordination, the analysis has cautioned. “India risks over-centralisation through State-led ventures but leaving the sector entirely to market forces could undermine geoeconomic and security interests…even when resources are secured, India lacks sufficient midstream and downstream infrastructure,” it has said.

CSEP’s findings coincide with the World Energy Outlook by the International Energy Agency which has also flagged that traditional energy risks affecting the security of oil and gas supply are now accompanied by vulnerabilities in critical minerals due to high levels of market concentration. “A single country is the dominant refiner for 19 out of 20 energy-related strategic minerals, with an average market share of around 70%.”

“These constraints expose the country to geopolitical risks, market volatility, and technological dependence at a moment when global competition for minerals is intensifying,” CSEP has said, as India advances its ambitious goal of net zero emissions by 2070.

“Critical minerals have moved to the forefront of India’s strategic agenda, as seen in the launch of the National Critical Minerals Mission and the resources dedicated to it. While the country remains import-dependent for several key materials, it is steadily advancing its processing capabilities and strengthening its domestic value chain. India’s expanding network of partnerships across key regions underscores how central they are to its green growth ambitions. The challenge now is to move beyond agreements toward actionable cooperation,” said Anindita Sinh, co-author of the report.