Critical and strategic minerals have emerged as foundational inputs in India’s next phase of economic transformation. With rapid growth in renewables, electric mobility, defence and semiconductors, minerals such as lithium, cobalt, nickel, graphite, rare earths and speciality alloys are becoming key to India’s industrial competitiveness and energy security. Unlike traditional bulk minerals, demand for these resources is technology-led, policy-backed and steadily expanding.
Simultaneously, supply dynamics remain complex and risk-prone. The global production and processing of several critical minerals are geographically concentrated, exposing importing economies to price volatility and geopolitical disruptions. India’s domestic resource base is uneven, with strengths in certain rare earth deposits but limited availability of key battery minerals, alongside gaps in advanced processing capacity. This growing divergence between rising demand and constrained supply has elevated mineral security to a strategic priority. Policy responses now reflect this strategic shift. India is aligning exploration, value addition, recycling and global partnerships with its industrial and energy transition priorities. Consequently, critical mineral demand and supply have moved beyond a sectoral issue to become central to economic resilience and strategic autonomy.
Demand dynamics for critical minerals
India’s shift towards clean energy, lower carbon emissions and electrification is increasing the demand for technology-intensive minerals used in renewable energy, electric vehicles (EVs) and energy storage, leading to steadily rising demand.
In the solar energy sector, critical minerals such as silicon, tellurium, indium and gallium are indispensable for the production of photovoltaic (PV) cells. India’s installed solar capacity of about 140 GW, as of January 2026, already represents a significant material footprint, requiring sustained imports and processing of these mineral inputs. As solar capacity expands further under national renewable energy targets, mineral intensity will grow proportionately.
Wind energy presents another clear example of mineral-driven demand growth. Rare earth elements such as neodymium and dysprosium are essential components in rare earth permanent magnets (REPMs) used in wind turbine generators. India’s target to scale wind capacity from the current 55 GW (as of January 2026) to 140 GW by 2030 represents about a threefold increase, implying a parallel surge in demand for rare earth materials.
Moreover, other sectors such as electric mobility have emerged as perhaps the most mineral-intensive pillars of India’s clean energy transition. Lithium, nickel and cobalt are fundamental to lithium-ion battery chemistry, which powers EVs across two-wheelers, passenger cars and buses. With India targeting 30 per cent EV penetration by 2030 under the global EV30@30 initiative, rising EV adoption drives demand for critical minerals across vehicle manufacturing, battery production, charging infrastructure and replacement cycles.
Beyond mobility, energy storage systems represent a critical and growing source of mineral demand. Grid-scale and distributed storage solutions rely heavily on lithium-ion batteries, which, in turn, depend on lithium, cobalt and nickel. As renewable energy penetration increases, intermittency management becomes essential, making large-scale storage systems indispensable. The push for advanced battery storage intensifies mineral demand, with expanding solar and wind capacity creating a multiplier effect that drives lithium and nickel consumption.
Policy-driven initiatives to strengthen supply
India’s approach to managing the demand and supply of critical and strategic minerals is consistently shifting from commodity-focused mining to a security-driven, value-chain strategy for critical minerals, aligned with energy transition and industrial goals. Recognising lithium, cobalt, nickel, graphite and rare earths as vital for EVs, renewables, electronics and defence, the government is building supply resilience over reliance on volatile global markets.
A central pillar of India’s critical mineral strategy is the National Critical Mineral Mission (NCMM), which adopts a life cycle approach spanning exploration, mining, beneficiation, processing, recycling and overseas asset acquisition. Launched in 2025, the mission targets the uptake of approximately 1,200 exploration projects between 2024-25 and 2030-31, signalling a systematic effort to bridge geological knowledge gaps and strengthen the domestic resource base. As part of this push, the Geological Survey of India (GSI) has significantly intensified its field activities, undertaking 195 exploration projects during the 2024-25 field season, followed by a further increase to 230 projects in 2025-26. This momentum reflects a calibrated effort to accelerate geological assessment and de-risk the identification of critical mineral deposits.
Beyond exploration, the mission is structured to reduce import dependence through accelerated mine development and transparent allocation of resources, with more than 100 critical mineral blocks slated for auction. Importantly, the strategy extends to offshore exploration, particularly in areas rich in polymetallic nodules containing cobalt, nickel and manganese, among others. By expanding the resource frontier both onshore and offshore, the NCMM reflects a deliberate shift from reactive procurement to proactive resource security, positioning domestic supply augmentation as a core element of long-term mineral resilience.
Increased focus on leveraging rare earth minerals
India’s renewed focus on rare earth minerals is rooted in the strength of its resource base and the strategic importance of downstream applications, particularly REPM manufacturing. As of February 2026, the country holds 13.15 million tonnes (mt) of monazite, containing an estimated 7.23 mt of rare earth oxides (REOs), forming a substantial foundation for domestic value addition. These deposits are geographically dispersed across Odisha, Kerala, Andhra Pradesh, Tamil Nadu, West Bengal, Gujarat, Maharashtra and Jharkhand. Additionally, 1.29 mt of in situ REO resources have been identified in hard rock areas of Gujarat and Rajasthan, broadening the scope for diversified extraction. Exploration efforts by GSI have further strengthened the outlook, identifying 482.6 mt of rare earth ore resources across 34 exploration projects, as of February 2026. Collectively, these figures bring out India’s strong raw material base capable of supporting an integrated REPM manufacturing ecosystem.
Despite this geological advantage, downstream manufacturing remains underdeveloped. India continues to rely heavily on imports, primarily from China, to meet domestic demand REPMs, with imports accounting for nearly 60-80 per cent by value and 85-90 per cent by quantity between 2022 and 2025. This import dependence is strategically significant, given that REPMs are critical components in EVs, wind turbines, advanced electronics and defence systems. With consumption of REPMs expected to double by 2030, driven by rapid growth in electric mobility, renewable energy expansion, electronics manufacturing and defence modernisation, the gap between resource availability and domestic processing capability becomes increasingly consequential.
To bridge this structural gap, the Union Budget 2026-27 prioritises strengthening domestic capabilities in critical materials. It reinforces the Rs 72.8 billion REPM Manufacturing Scheme approved in November 2025, which targets the development of 6,000 mt per annum capacity, alongside corridor-based initiatives to deepen value-chain integration. Dedicated rare earth corridors in Odisha, Kerala, Andhra Pradesh and Tamil Nadu aim to integrate mining, processing, research and advanced manufacturing. Beyond curbing import dependence, these measures seek to build regional industrial ecosystems, expand research and development, and enhance India’s competitiveness in global advanced materials value chains.
Navigating towards strategic mineral security
India’s energy transition targets, including 45 per cent reduction in emissions intensity by 2030, 50 per cent installed power capacity from non-fossil sources by 2030, and net zero emissions by 2070, will significantly reshape the country’s mineral demand profile. In this context, the NCMM assumes strategic importance as a coordinating framework to build a resilient and self-reliant ecosystem for critical and strategic minerals. The mission’s emphasis on domestic exploration, private sector participation, regulatory streamlining and international partnerships reflects a recognition that mineral security is foundational to climate security.
On the demand side, the scale and timing of requirements necessitate anticipatory planning rather than reactive procurement. A 2026 NITI Aayog Critical Mineral Assessment Report released in February 2026 highlights that India’s pathway to net zero will be materially shaped by secure and affordable access to critical energy transition minerals. Under the Net Zero Scenario, India’s demand by 2050 could average around 9 per cent of the global demand across key shared minerals; although substantial in absolute terms, it is insufficient to confer price-setting power. Illustratively, projected requirements exceeding 20 mt of copper and 14 mt of graphite by 2050 justify early investments in exploration, processing and substitution research. Besides, international collaborations are expanding. Exemplifying this aspect, in February 2026, the Department of Science and Technology’s TEXMiN Foundation and Russia’s GIREDMET Institute signed an MoU on rare earth and critical mineral technologies. The partnership aims to jointly advance mining, processing and advanced materials research, strengthen domestic capabilities and reduce import dependence across the critical mineral value chain.
On the supply side, a multilayered approach is essential. First, domestic resource mapping and auction reforms must accelerate to convert geological potential into commercially viable reserves. Second, India must strategically integrate into global mineral value chains through equity stakes in overseas assets, long-term offtake agreements and technology partnerships, thereby diversifying supply sources. Third, downstream processing and advanced materials manufacturing require policy support to prevent the persistence of a mine-to-export model that forfeits value addition. The integration of processing clusters, research institutions and manufacturing corridors can reduce import dependence in refined products and intermediate components.
Equally critical is embedding circularity in the mineral strategy. Given that a significant share of demand materialises post-2040, establishing robust recycling ecosystems for batteries, electronics and renewable energy components today can moderate future primary extraction pressures. Urban mining, recovery from fly ash and tailings, and end-of-life battery regulations should be treated not as environmental adjuncts but as core pillars of supply security. Over time, secondary supply could meaningfully buffer India against global price volatility and geopolitical concentration risks. In short, India must shift from extraction-centric policies to a systems-level strategy that anticipates long-term demand, diversifies and localises supply chains, embeds circularity and aligns mineral policy with industrial competitiveness.
As technology leadership depends on a secure access to critical minerals, mineral security will be central to the credibility and resilience of India’s energy transition.
Aditi Gupta
