Context

• As India charts a path toward becoming a manufacturing and technological powerhouse, the need for critical minerals is paramount.
• These minerals form the backbone of advanced industries such as electronics, renewable energy, and defence manufacturing, however, India's dependency on imports, especially from China, poses strategic vulnerabilities.
• Union Defence Minister Rajnath Singh’s remarks about the weaponisation of resources highlight growing concerns about mineral security, driving India to pursue mineral diplomacy as a cornerstone of its strategy to mitigate this dependence.

A Closer Look of the Pillars of India's Mineral Diplomacy

• Developing Joint Ventures with Resource-Rich Nations: Building Bilateral Ties
  • These joint ventures are designed to reduce India’s reliance on a single source, particularly Chin, and ensure consistent access to these indispensable resources.
  • A 2022 agreement between India and Australia marked a significant milestone, identifying lithium and cobalt projects for collaboration.
  • This partnership leverages Australia’s robust mining sector to meet India’s growing demand for these minerals.
  • The South American Region, comprising Argentina, Chile, and Bolivia, is a global hub for lithium resources.
  • India’s $24 million lithium exploration pact with Argentina in 2024 demonstrates its commitment to securing raw materials for lithium-ion battery production. Similarly, efforts are underway to acquire assets in Bolivia and Chile.
• Role of KABIL
  • The creation of Khanij Bidesh India Ltd. (KABIL) exemplifies India’s strategic approach to mineral diplomacy.
  • KABIL functions as a joint venture tasked with identifying and acquiring critical mineral assets worldwide.
  • By facilitating agreements through various routes, government-to-government, government-to-business, and business-to-business, KABIL plays a pivotal role in securing India’s mineral future.
• Private Sector Participation
  • India’s private sector has also begun to capitalise on these international collaborations.
  • For instance, Altmin Private Limited partnered with Bolivia’s state-owned company YLB to ensure the supply of raw materials for lithium-ion batteries.
  • Such initiatives not only strengthen India’s supply chain but also boost private sector involvement in global mineral trade.
• Central Asia and Titanium Resources
  • Central Asia has emerged as another focal point of India’s mineral diplomacy.
  • The establishment of IREUK Titanium Limited in Kazakhstan is a landmark achievement, reflecting India’s intent to tap into the region’s rich titanium reserves.
  • This venture aligns with New Delhi’s proposal to create an India-Central Asia Rare Earths Forum, which aims to deepen collaboration in exploring and utilizing the region’s mineral wealth.

 Challenges in India’s Mineral Diplomacy

• Limited Private Sector Involvement
  • India’s private sector has played a minimal role in the critical minerals supply chain.
  • This is largely due to the absence of a clear roadmap and policy framework for private sector participation.
  • Without an overarching supply chain strategy, businesses lack direction and incentive to invest in critical mineral initiatives.
• Weak Diplomatic Capacity
  • India’s diplomatic apparatus currently lacks the dedicated resources to address the nuances of mineral diplomacy.
  • Establishing a dedicated mineral diplomacy division within the Ministry of External Affairs, akin to the New and Emerging Strategic Technologies (NEST) division, could enhance India’s engagement with international partners.
• Insufficient Sustainable Partnerships
  • While India has formed agreements with several countries, many of these partnerships lack long-term sustainability.
  • Building trusted and strategic alliances, particularly with technologically advanced nations like South Korea, the European Union, and other Quad members, is crucial for advancing India’s mineral security.

The Path Forward to Strengthening India’s Mineral Diplomacy

• Diversifying the Supply Chain
  • India’s dependence on a few nations for critical minerals poses significant risks to its mineral security.
  • Geopolitical volatility, regulatory changes, or economic disruptions in supplier nations could impact India’s access to essential resources.
  • India must seek new partnerships with emerging resource-rich nations, particularly in Africa, Central Asia, and Southeast Asia.
  • Countries like Namibia, the Democratic Republic of Congo (DRC), and Indonesia hold substantial reserves of critical minerals like lithium, cobalt, and nickel, offering opportunities for diversification.
  • For instance, India can replicate successful models like its agreements with Australia and Argentina by negotiating government-to-government pacts with these nations.
• Reducing Reliance on China and Forming Regional Alliances
  • While China dominates the global supply chain for many critical minerals, India must develop alternative sourcing channels to reduce its strategic dependence.
  • Strengthening ties with democratic and like-minded nations such as Japan, South Korea, and the United States can help diversify supply routes.
  • India’s proposed India-Central Asia Rare Earths Forum could serve as a template for creating regional alliances.
• Building Diplomatic and Institutional Capacity
  • Dedicated Mineral Diplomacy Division
    • Creating a specialised division within the Ministry of External Affairs to focus exclusively on mineral diplomacy will enhance policy coherence and execution.
    • This division should monitor global mineral trends, facilitate bilateral and multilateral engagements, and ensure alignment with national priorities.
  • Deploying Experts in Key Missions
    • Resource-rich nations and regions like Latin America, Africa, and Central Asia require India’s diplomatic missions to include mineral experts.
    • These specialists can proactively identify opportunities, mitigate challenges, and strengthen India’s presence in critical mineral markets.
  • Institutional Coordination
    • Enhanced collaboration between ministries (e.g., Mines, External Affairs, and Industry) and organizations like KABIL and NITI Aayog will ensure a unified approach to mineral security.
    • Establishing an inter-ministerial task force to align strategies and coordinate actions will be beneficial.
• Strengthening Private Sector Involvement
  • Developing a Supply Chain Strategy
    • India needs a national strategy for critical minerals that clearly outlines the role of the private sector.
    • This strategy should include guidelines for exploration, mining, processing, and recycling, along with financial incentives to encourage private investment.
  • Public-Private Partnerships (PPPs)
    • Promoting PPP models will enable private enterprises to leverage government support for risk management, infrastructure development, and capacity-building.
    • Collaborations between government entities like KABIL and private firms can create a seamless value chain.
  • Supporting Startups and Innovation
    • Encouraging startups to explore cutting-edge technologies for mineral extraction and processing will strengthen India’s domestic capabilities.
    • Providing funding, incubation, and mentorship to such ventures can accelerate innovation in this sector.

Conclusion

• India’s journey toward mineral security is both ambitious and necessary to support its aspirations as a global manufacturing and technological leader.
• While initiatives like KABIL and international collaborations represent significant strides, addressing existing gaps in private sector engagement, diplomatic capacity, and sustainable partnerships will be crucial.
• By resolving these issues, India can reduce its strategic vulnerabilities and establish itself as a key player in the global critical mineral supply chain.