A Strategic Move to Counter China’s Dominance and Secure Future Resources
Critical minerals are the foundation of modern and emerging technologies, playing a pivotal role in clean energy, semiconductor manufacturing, and the defence and aerospace sectors. However, global supply chains for these minerals are highly concentrated, with China holding a near-monopoly, making the market vulnerable to geopolitical leverage and price volatility.
To reduce dependence on China and accelerate its green energy transition, the Indian government approved the National Critical Mineral Mission on January 29, 2025. With a budget of ₹34,300 crore—of which ₹16,300 crore has been allocated initially—this seven-year initiative aims to boost domestic exploration, secure offshore resources, and strengthen India’s mineral processing capabilities. The government also expects ₹18,000 crore in investments from PSUs to support the initiative.
Why Critical Minerals Matter
These minerals are essential for India’s advancement in clean energy, high-tech industries, and defence. Key minerals under the mission include:
- Lithium – Essential for EV batteries and renewable energy storage
- Cobalt – Used in battery production and high-tech applications
- Nickel – Crucial for stainless steel and battery manufacturing
- Graphite – A key component in batteries and lubricants
- Rare Earth Elements (REEs) – Vital for electronics, telecommunications, and defence technologies
Key Objectives of the National Critical Mineral Mission
The mission, announced in the Union Budget 2024-25, is a crucial part of the Atmanirbhar Bharat initiative and focuses on:
✅ Expanding Exploration & Processing – Strengthening domestic and offshore exploration while enhancing mineral beneficiation and refining capabilities.
✅ Fast-Tracking Regulatory Approvals – Simplifying approval processes to accelerate critical mineral mining projects.
✅ Financial Incentives – Encouraging investment in mineral exploration and promoting resource recovery from waste and end-of-life products.
✅ Stockpiling Critical Minerals – Developing a national reserve to ensure supply security and counter market fluctuations.
✅ Overseas Acquisitions & Trade Partnerships – Supporting Indian PSUs and private sector companies in acquiring critical mineral assets abroad.
✅ Mineral Processing Parks – Establishing dedicated zones for refining and processing, ensuring value addition within India.
✅ Research & Innovation – Setting up a Centre of Excellence on Critical Minerals to advance mining and processing technologies.
India vs. China: Reducing Dependency
China dominates global mineral processing, controlling 29 key commodities, including 22 metals and seven industrial minerals. Even where it lacks a complete monopoly, it exerts a monopsony effect—a scenario where a single dominant buyer dictates market conditions. This allows Beijing to manipulate prices and wield geopolitical influence.
By launching the National Critical Mineral Mission, India aims to diversify supply chains, strengthen domestic capabilities, and enhance energy security. With a strong push for self-reliance, the initiative is expected to bolster India’s position in the global energy race and safeguard its economic and strategic interests in the long run.