Mentor’s Comment

India’s clean energy transition is increasingly constrained not by ambition, but by access to critical minerals and rare earths. This article examines how India’s minerals diplomacy has expanded rapidly across continents, yet remains limited by weak domestic processing capacity and fragmented strategic focus. The analysis is crucial for GS Paper III (Energy, Resources, Industrial Policy) and GS Paper II (International Relations).

Why in the News

India’s clean energy transition is facing serious risks due to shortages of critical minerals and rare earths, worsened by tighter global export controls. For the first time, India has adopted a multi-continent minerals diplomacy strategy, signing nearly a dozen agreements in the last five years with Australia, Japan, Africa, Latin America, and Canada. This is a clear shift from India’s earlier ad-hoc and import-based mineral sourcing. However, the article points out a major weakness: India has not been able to convert these partnerships into strong value-chain security because of poor domestic refining, processing, and midstream capacity. This structural gap affects key sectors such as electric vehicles, batteries, semiconductors, and renewable energy equipment.

What makes minerals central to India’s clean energy transition?

1. Clean energy dependence: Requires lithium, cobalt, nickel, copper, and rare earths for EVs, batteries, wind turbines, and solar technologies.
2. Supply concentration: Global production and processing dominated by a few countries, increasing vulnerability.
3. Export controls: Tightening restrictions by China and others heighten urgency for diversification.
4. Strategic risk: Disruptions affect industrial growth, energy security, and technological sovereignty.

How has India expanded its mineral diplomacy?

1. Bilateral partnerships: Nearly a dozen agreements signed in five years across multiple continents.
2. Policy integration: External engagement aligned with domestic mineral policy reforms.
3. Market building: Focus on responsible sourcing and standards-based mineral markets.
4. Strategic shift: Move from trade-based imports to long-term access arrangements.

Why are Australia and Japan pivotal partners?

1. Australia-reliability: Offers political stability, reserves, and a long-term strategic vision.
   1. Investment coordination: India-Australia Critical Minerals Partnership identified five lithium and cobalt projects (2022).
2. Japan-resilience model:
   1. Diversification strategy: Responded to China’s rare-earth export restrictions with stockpiling, recycling, and R&D.
   2. Institutional strength: Demonstrates importance of long-term planning and industrial policy.

What role does Africa play in India’s mineral strategy?

1. Resource availability: Lithium (Namibia), rare earths and uranium (Namibia), copper and cobalt (Zambia).
2. Existing trade links: Provide entry points for deeper cooperation.
3. Structural risks:
   1. Regulatory volatility: Shifting trade rules and restrictions on raw exports.
   2. Geopolitical competition: China’s entrenched presence raises coordination costs.
4. Strategic requirement: Needs long-term engagement, not transactional deals.

How do geopolitics shape India’s options with the US, EU, Russia, and West Asia?

1. United States:
   1. Volatility risk: Trade policy shifts reduce reliability.
   2. Technology leverage: Strategic Technology TRUST Initiative enables joint processing, batteries, and clean tech.
2. European Union:
   1. Regulatory alignment: Battery Regulation and Critical Raw Materials Act support recycling and transparency.
   2. Sustainability convergence: ESG norms create compliance-driven partnerships.
3. Russia:
   1. Resource abundance: Nickel, cobalt, and lithium.
   2. Operational limits: Sanctions, financing barriers, and logistics constrain reliability.
4. West Asia:
   1. Institutional deficit: Lacks depth in mining frameworks despite proximity.

Why is Latin America an emerging frontier?

1. Resource centrality: Argentina, Chile, Peru, and Brazil crucial for copper, nickel, and lithium.
2. Indian investments:
   1. KABIL signed a USD 200 million lithium exploration and development agreement with Argentina.
   2. Hindalco expanding overseas copper assets.
3. Competitive pressure: China and Western firms are already deeply embedded.
4. Strategic lesson: Late entry requires value-added partnerships, not extraction-only deals.

Why are integrated partnerships more important than access alone?

1. Processing gap: India lacks refining and midstream capacity.
2. Value-chain weakness: Extraction without processing perpetuates dependency.
3. Technology deficit: Advanced batteries and recycling dominate future competitiveness.
4. Strategic failure risk: Country-to-country agreements cannot substitute domestic capability.

Conclusion

India’s mineral diplomacy has expanded rapidly and strategically, but access without processing capacity cannot deliver resilience. Long-term security depends on domestic refining, recycling, technology acquisition, and institutional coordination. The next phase must shift from signing agreements to building value chains.

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