India's firmer attempts at mineral diplomacy

India’s Firmer attempts at Mineral Diplomacy

India, a major critical mineral importer, still depends on other countries, primarily China, for its mineral security, which has become a cause of strategic concern. In response, India has initiated efforts to engage in mineral diplomacy to secure its supply chains.

Table of Contents

India’s Critical Mineral Dependency: Challenges

Heavy Dependency: India has a 100% reliance on imports of lithium, cobalt, and nickel. This heavy dependence poses risks, especially given the geopolitical tensions surrounding these resources.
- China’s Near-Monopoly: Approximately 70% of India’s lithium imports come from China, highlighting a near-monopoly that raises national security concerns.
Increased Demand: The value of India’s critical mineral imports has surged from $475 million in FY15 to nearly $4.93 billion in FY24.
Lack of domestic production: Despite having reserves of certain critical minerals (e.g., cobalt and copper), India has not yet developed robust domestic production capabilities.

India’s Perception of Mineral Diplomacy

Engagement Pillars: India’s mineral diplomacy relies on two major pillars:
- Bilateral and Multilateral Engagement: Strengthening ties with resource-rich nations (e.g., Australia, Argentina, Chile, Kazakhstan) and participating in international forums like the Quad, Indo-Pacific Economic Framework (IPEF), and the Mineral Security Partnership (MSP).
Strategic Partnerships: Establishing joint ventures such as Khanij Bidesh India Ltd. (KABIL) to secure critical mineral resources through agreements and investments.
Government Initiatives:
- KABIL’s Agreements: Partnerships with Australia, Latin American countries (e.g., a $24 million lithium pact with Argentina), and Kazakhstan (IREUK Titanium Limited) to bolster mineral security.
- Policy Cooperation: MoUs with organizations like the International Energy Agency (IEA) to streamline policies and adopt global best practices.

India’s Initiatives to Reduce Dependency

● The government has launched the Critical Minerals Mission.

● Reduced import duties on various critical minerals.

● Implemented measures to step up exploration campaign by auctioning off mining blocks.

● Expanded the Deep Ocean Mission.

Challenges in India’s Mineral Diplomacy

Lack of Private Sector Participation: Private enterprises are largely absent from India’s critical mineral initiatives.
- There is no clear roadmap or strategy to integrate the private sector into the mineral supply chain.
Weak Diplomatic Capacity: India lacks a dedicated framework for mineral diplomacy within its diplomatic apparatus.
- The absence of specialized roles for mineral diplomacy in key missions hampers effective engagement.
Insufficient Sustainable Partnerships: India’s collaborations are yet to mature into long-term, sustainable partnerships.
Absence of a Clear Supply Chain Strategy: A comprehensive critical mineral supply chain strategy is missing.

Way Forward

Formulate a clear, long-term strategy that covers exploration, acquisition, processing, and utilization of critical minerals.
Strengthening ties with trusted partners like the EU, South Korea, and Quad members is crucial for enhancing supply chain resilience.
India needs to formulate policies considering national security and growth prospects to de-risk mineral acquisition.
Ensure that India’s mineral acquisition strategy prioritizes environmental and ethical standards.