Mentor’s Comment

Critical minerals are now central to India’s industrial and geopolitical strategy. The Union Budget 2026 marks a shift from policy intent to implementation, focusing on processing capacity, domestic value addition, and secure supply chains. With 30 minerals identified and ₹16,300 crore allocated under the National Critical Minerals Mission, India is prioritising strategic autonomy amid global supply disruptions.

Why is the shift to critical minerals a strategic turning point for India?

1. Policy Mainstreaming: Moves critical minerals from peripheral policy concern to core industrial and geopolitical agenda. Budget speech shifts focus from identification to execution
2. Institutional Framework: Establishes National Critical Minerals Mission (NCMM) with ₹16,300 crore outlay to coordinate exploration, mining, and processing.
3. Strategic Context: Responds to global weaponisation of rare earth magnets and battery supply chains in 2025, exposing industrial vulnerabilities
4. Global Concentration Risk: China controls up to 90% of global processing capacity for several critical minerals, creating supply asymmetry.
5. Implementation Phase: Shifts discourse from “Does India need a policy?” to “Can India execute at scale, speed, and depth?”

How does governance architecture address exploration and processing gaps?

1. Mineral Identification: Notifies 30 critical minerals to guide regulatory and fiscal prioritisation
2. Exploration Reform: Eases mineral exploration norms for junior miners and rationalises royalty rates.
3. Project Pipeline: Targets 1,200 exploration projects by FY2031 under NCMM.
4. Fiscal Incentives: Enables tax deductions for exploration expenditure for nine critical minerals.
5. Processing Capability: Leverages existing capacity in copper, graphite, rare earth oxides, tin, and titanium, often exceeding 99.9% purity.
6. Technological Upgradation: Recognises need for deeper refining and advanced processing for clean energy and defence applications.

Does demand creation remain the missing link in mineral security?

1. Capital Goods Rationalisation: Removes import duties on capital goods used in processing of critical minerals
2. Domestic Manufacturing Push: Links mineral processing to batteries, solar modules, wind turbines, and electric vehicles.
3. Demand Constraint: Identifies lack of assured domestic demand as a barrier to private investment in refining capacity.
4. Industrial Multiplier: Expands electric mobility and renewable energy deployment to generate downstream mineral demand.
5. Backward Integration: Addresses delays in domestic value chain integration that create uncertainty for midstream processors.

Can technology and AI-driven governance enhance mineral discovery and efficiency?

1. AI-First Exploration: Mandates Artificial Intelligence integration in mineral exploration to de-risk investments.
2. Institutional Convergence: Aligns IndiaAI Mission, National Geospatial Policy, and Mission Anveshan for data-driven exploration.
3. Hydrocarbon Model Extension: Expands seismic and geospatial analytics used in hydrocarbon discovery to mineral exploration.
4. Geoscience Data Repository: Improves prospectivity analysis and site discovery through centralised digital data systems.
5. Tax Support: Extends tax deductions for exploration expenditure to reduce risk premium.

How does geopolitical disruption reshape India’s strategic mineral policy?

1. Rare Earth Corridors: Announces development of rare earth corridors across coastal States.
2. Import Substitution: Reduces import duties on monazite sands to secure feedstock.
3. Technological Sovereignty: Uses supply chain disruption as leverage to build domestic magnet and battery ecosystems.
4. State Role: Encourages States to upgrade port infrastructure and manpower to serve global demand.
5. Regional Growth: Links mineral processing clusters to job creation and industrial diversification.

Are international partnerships aligned with domestic capacity building?

1. Strategic Partnerships: Expands cooperation with Australia, European Union, Japan, United Kingdom, and United States.
2. Technology Transfer Challenge: Addresses reluctance of advanced economies in sharing high-end processing technologies.
3. Regulatory Certainty: Strengthens legal frameworks to attract foreign mineral processing investment.
4. Sintered Magnet Scheme: Allocates ₹7,280 crore for permanent magnet manufacturing ecosystem.
5. Trade Integration: Aligns mineral strategy with India-EU Free Trade Agreement and global supply chain networks.
6. Research Collaboration: Enhances academic and industrial linkages through UK-India Critical Minerals Supply Chain Observatory.

Conclusion

Critical mineral security is no longer a sectoral concern but a strategic imperative linking energy transition, manufacturing growth, and geopolitical autonomy. Budget 2026 signals a shift from ambition to execution, with emphasis on processing, technology, and global partnerships. Sustained coordination between the Union, States, and industry will determine whether India can convert mineral potential into long-term industrial and strategic strength.

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