Amid China concerns, India & US ink pact to secure critical minerals supply
The growing strategic competition with China has pushed countries across the world to rethink their dependence on critical mineral supply chains. In this context, the recent agreement between India and the United States to strengthen cooperation in securing critical minerals marks an important development in economic security, clean energy transition, and geopolitical strategy. The pact reflects a shared understanding that minerals such as lithium, cobalt, nickel, graphite, and rare earth elements are indispensable for emerging technologies, electric vehicles, semiconductors, renewable energy systems, and defence manufacturing.
The agreement comes amid increasing concerns regarding China’s overwhelming dominance in mining, processing, and refining of critical minerals. For India, which aims to become a global manufacturing hub and accelerate its green transition, diversification of mineral supply chains has become a strategic necessity.
What are Critical Minerals?
Critical minerals are minerals essential for economic development and national security, but whose supply chains are vulnerable to disruption. Different countries maintain different lists depending on strategic requirements.
Key Critical Minerals
- Lithium
- Cobalt
- Nickel
- Graphite
- Rare Earth Elements (REEs)
- Copper
- Silicon
- Manganese
These minerals are vital for:
- Electric Vehicle (EV) batteries
- Solar panels and wind turbines
- Semiconductors and electronics
- Defence technologies
- Aerospace manufacturing
- Artificial Intelligence infrastructure
India identified 30 critical minerals in 2023 based on recommendations of the Ministry of Mines.
Why is the India–US Pact Significant?
1. Reducing Dependence on China
China currently dominates:
- Rare earth processing
- Battery manufacturing
- Graphite refining
- Lithium-ion supply chains
China controls a major share of global processing capacity for several critical minerals. This creates strategic vulnerabilities for countries dependent on Chinese supply chains.
The India–US partnership aims to:
- Diversify supply chains
- Develop alternative processing ecosystems
- Enhance resilience against geopolitical disruptions
- Prevent weaponisation of mineral exports
This became more relevant after China imposed export restrictions on certain minerals and technology components in recent years.
2. Boosting India’s Green Energy Transition
India has ambitious renewable energy and EV targets:
- Net-zero target by 2070
- Rapid EV adoption
- Expansion of solar and battery manufacturing
However, these goals require stable access to minerals like lithium and cobalt.
The pact can help India:
- Secure long-term supplies
- Develop battery manufacturing ecosystems
- Reduce import vulnerability
- Promote domestic value addition
It aligns with initiatives such as:
- Production Linked Incentive (PLI) Scheme
- National Green Hydrogen Mission
- Make in India
- Atmanirbhar Bharat
3. Strategic Convergence Between India and the US
The agreement reflects the growing strategic partnership between India and the US across:
- Defence
- Technology
- Semiconductors
- Maritime security
- Supply chain resilience
Critical minerals are now becoming part of broader strategic cooperation under frameworks like:
- Indo-Pacific Economic Framework (IPEF)
- Quad cooperation
- Initiative on Critical and Emerging Technologies (iCET)
The partnership signals a shift from purely military cooperation toward geo-economic security.
Why are Critical Minerals Becoming Geopolitical Tools?
The 21st century global economy is increasingly dependent on advanced technologies and clean energy systems. Countries controlling mineral supply chains can exercise significant geopolitical influence.
China’s Dominance
China has invested heavily in:
- African mining projects
- Latin American lithium reserves
- Rare earth processing facilities
- Global battery manufacturing
As a result, many countries fear:
- Supply disruptions
- Price manipulation
- Strategic coercion
- Overdependence on one country
The India–US pact is therefore part of a wider global effort to create “friend-shoring” and trusted supply networks.
Opportunities for India
1. Developing Domestic Mining Capacity
India possesses reserves of:
- Lithium (recent discoveries in Jammu & Kashmir)
- Rare earth elements
- Graphite
- Titanium
The partnership may bring:
- Technology transfer
- Investment in exploration
- Advanced refining technologies
- Joint ventures
2. Becoming a Manufacturing Hub
India seeks to emerge as:
- A battery manufacturing centre
- An EV production hub
- A semiconductor manufacturing destination
Stable mineral access is essential for these ambitions.
The pact can support:
- Gigafactory development
- Electronics manufacturing
- Renewable energy equipment production
3. Strengthening Supply Chain Resilience
Global disruptions during the COVID-19 pandemic and geopolitical tensions exposed vulnerabilities in concentrated supply chains.
India can position itself as:
- An alternative manufacturing destination
- A trusted democratic partner
- A stable Indo-Pacific economic actor
Challenges Before India
1. Limited Processing Capacity
India currently lacks large-scale:
- Mineral refining infrastructure
- Battery recycling systems
- Advanced extraction technology
Merely possessing mineral reserves is insufficient without downstream processing capabilities.
2. Environmental Concerns
Mining projects often lead to:
- Deforestation
- Water contamination
- Tribal displacement
- Ecological degradation
India must ensure:
- Sustainable mining practices
- Environmental safeguards
- Community participation
Balancing development with environmental protection remains crucial.
3. Global Competition
Countries including:
- Australia
- Japan
- European Union members
- South Korea
are also aggressively pursuing critical mineral partnerships.
India must move quickly to secure overseas assets and strategic agreements.
4. Dependence on Imports May Continue
Even with new agreements, India may remain dependent on imports for:
- Lithium
- Cobalt
- Advanced battery components
Building complete self-reliance will take time and substantial investment.
India’s Policy Measures
India has already initiated several measures:
- Critical Minerals Mission
- Auction of lithium blocks
- Overseas mineral acquisition efforts
- PLI schemes for batteries and semiconductors
- Exploration reforms under the Mines and Minerals framework
Public sector companies such as Khanij Bidesh India Limited (KABIL) are also exploring overseas mineral assets.
Way Forward
Diversification of Sources
India should secure mineral partnerships with:
- Australia
- Argentina
- Chile
- African nations
Strengthening Domestic Ecosystem
Focus areas include:
- Exploration
- Refining
- Recycling
- Research and development
Strategic Reserves
India should build strategic mineral reserves similar to petroleum reserves.
Sustainable Mining
Strong environmental governance and local community participation are essential.
Technological Innovation
Investment in:
- Battery recycling
- Alternative chemistries
- Circular economy systems
can reduce import dependence.
Conclusion
The India–US critical minerals pact represents more than an economic agreement; it is a strategic response to the changing geopolitical realities of the 21st century. As clean energy technologies, semiconductors, and advanced manufacturing become central to global power competition, access to critical minerals will increasingly shape national security and economic resilience.
For India, the partnership offers an opportunity to reduce excessive dependence on China, strengthen supply chain resilience, and accelerate its transition toward a green and technologically advanced economy. However, success will depend on India’s ability to build domestic capabilities, ensure sustainable mining, and integrate itself into trusted global value chains.
In the emerging geopolitical order, critical minerals may become as strategically important as oil was in the 20th century.
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