A report from the Global Trade Research Initiative (GTRI) underscored the imperative need for measures such as fiscal incentives, technological and infrastructural investments, overseas mining operations, and a supportive regulatory environment to propel the development of India’s critical mineral sector. Released on Monday, the report emphasized that India’s focus on fostering its critical mineral sector is paramount for the advancement of high-tech and renewable energy technologies.
Currently, India heavily relies on imports, predominantly from countries like China, Congo, Chile, Indonesia, South Africa, Argentina, Vietnam, the US, Canada, and Australia. The report highlighted the significance of critical minerals, including lithium, chromium, cobalt, antimony, and others, in the production of cutting-edge technologies such as mobile phones, wind turbines, electric vehicles (EVs), solar panels, drones, and more.
Termed ‘critical minerals,’ their scarcity due to supply disruptions, political tensions, or other factors can have adverse effects on a country’s security and economy. Despite India possessing substantial reserves of rare earth elements and other critical minerals, the lack of domestic processing facilities leads to high import dependency.
“As the world continues to transition towards green technologies, the importance of these minerals and the geopolitics surrounding them will only increase. The world is already witnessing critical mineral supply gaps,” noted GTRI Founder Ajay Srivastava. The report highlighted the surge in demand for critical minerals, resulting in supply-demand deficits and price volatility, potentially impacting industries, hindering clean energy transitions, and affecting energy security.
To address these challenges, the report recommended that the government identifies critical minerals, supports processing industries through subsidies and research and development initiatives, and establishes favorable trade policies to secure raw materials. Additionally, it stressed the importance of developing refining facilities, research centers, and logistics networks.
The report urged India to integrate into global supply chains by forming strategic partnerships and investing in mining operations abroad to ensure a steady supply of raw materials. The focus should be on exporting value-added products and finished goods rather than raw minerals. It also called for a regulatory environment conducive to processing industry growth, streamlined permitting processes, and policies attracting foreign investments.
Lithium, cobalt, graphite, gallium, germanium, and rare earth elements were highlighted as essential components for various high-tech applications. The report emphasized the need for India to establish a technological and infrastructural edge in processing critical minerals and strategically position itself in global supply chains.
