Tapping minerals, pushing deep: Can India become a global leader in the critical minerals sector?

India is one of the world’s largest producers of minerals. Its portfolio includes coal, iron ore, bauxite, zinc, lead, silver, copper, and a growing focus on critical minerals such as lithium, cobalt, nickel and rare earth (RE) elements. Its mineral industry provides inputs for construction, energy, manufacturing and infrastructure, while critical minerals are needed for inputs for RE, EVs, electronics, batteries, etc. Keeping in mind current geopolitical factors like tariffs, India’s mineral industry will play an increasingly important role in the country’s economy.The mining and exploration sector contributes 2-3% to India’s GDP, and millions of jobs, both directly in mining and indirectly in related industries. But challenges remain in exploration, regulations and environmental clearances. GoI’s policy for recovery of critical minerals from tailings or byproducts of mining; removal of import duty on 12 critical minerals, cobalt powder, lithium-ion battery scrap, and lead; introduction of a state mining index; and customs duty waivers to include additional critical minerals, have helped.

Recently, the Union Cabinet approved launch of the National Critical Mineral Mission (NCMM), with an expenditure of ₹16,300 cr, and ₹18,000 cr by PSUs. NCMM will encompass the entire value chain, from exploration, mining and beneficiation, to processing and recovery. It plans to intensify exploration of critical minerals within the country and offshore, and to create a fast-track regulatory approval process for critical mineral mining projects, including offering financial incentives.

Mining sector reforms will strengthen India’s value chain. Reducing import duties on critical minerals, including waste and scrap, will help domestic manufacturing industries. But the industry shouldn’t overly rely on their imports. Historically, global manufacturers tend to dump low-quality scrap and waste in developing economies leading to poor quality of end-use products. To avoid this, GoI should introduce quality standards linked to specific end-use of critical minerals on this list.

Budget 2025’s allocation of ₹3k cr to enhance capacity for exploration and surveying of mineral deposits, with a specific focus on critical minerals, will help accelerate demand for the metal industry. With the second phase of PLI announced for the speciality steel sector, it may provide a fillip to select the flat and long product steel category. Important reforms – including customs tariff rationalisation, framework allowing voluntary revision of customs duty, refund on import-export, time-bound closure of provisional assessment – can facilitate trade and ease of doing business.

Also, according to the budget, National Mineral Exploration Trust (NMET) would receive additional funding for mapping untapped resources of critical minerals, and for mineral beneficiation and extraction technologies. It also proposed tax incentives and subsidies for adoption of green technologies in the mining sector, water conservation techniques and reduction of carbon emissions. To support EV and battery manufacturing, GoI announced creation of a national mineral critical supply chain, for domestic sources for lithium, cobalt and other essential minerals, as well as proposing a stronger role for PPPs in the sector. By involving private players, extraction could be accelerated and overall efficiency of the mining industry improved.With the expansion of this sector, there should be a growing demand for skilled labour. Here, skill development programmes, including specialised training in green mining technologies, mineral processing and sustainable extraction practices, can be crucial. As demand for critical minerals grows exponentially, gaining self-sufficiency is crucial.With the right policy pushes on increasing domestic production, securing supply chains and ensuring sustainable practices, India could emerge as a global leader in the critical minerals sector. This will not only enhance India’s energy security but also position it as a key player in the global green and tech-driven economy.

The writer is former chairman, CCI