India must fundamentally restructure its critical minerals framework to prioritise the midstream chokepoint
India’s global standing regarding its critical mineral strategy is built upon 2 pillars: domestic exploration and diversification of import sources. It is driven by an unprecedented opportunity to catalyse green industrial modernisation while simultaneously confronting the reality of limited domestic reserves for several critical energy transition minerals.
The nation's macroeconomic ambitions encompassing achieving 50% of cumulative installed electric power capacity from non-fossil-fuel sources by 2030, driving 30% electric vehicle (EV) penetration by 2030, and attaining net-zero greenhouse gas emissions by 2070, are inextricably linked to the secure supply of critical minerals which form the backbone of this transition.
Consequently, the demand for these minerals such as lithium, graphite, cobalt, nickel, and rare earths within India is projected to exceed 250 kilotonnes by 2030. As we know, import dependency for these minerals is almost 100%. Unlike conventional energy imports, these dependencies are often concentrated in a limited number of producing and processing countries, exposing India to multifarious risks of geopolitical nature, leading to supply chain disruptions and trade restrictions, to name a few. Ensuring secure access to these resources has therefore become a priority for India to not just offset the risks but also to continue demonstrating the country as a competitive global player in clean energy value chains.
To secure these resources, the Indian government has initiated a flurry of international engagements, signing memoranda of understanding (MoUs), joining multilateral coalitions, and establishing bilateral frameworks. From the formation of Khanij Bidesh India Limited (KABIL) to spearhead overseas asset acquisition, to recent high-profile strategic partnerships with the United States, Australia, and Argentina, the diplomatic narrative suggests aggressive forward momentum. While these are a step in the right direction, the movement from agreement to execution might be slower than expected.
It seems that India's critical minerals story remains stuck at the agreement phase. While the diplomatic architecture expands, the domestic and international physical supply chains remain embryonic for India. The nation is trapped in a paradigm characterised by a deficit in midstream processing capabilities, an inability to operationalise domestic upstream auctions efficiently, and a lack of long-term, risk-tolerant private capital. To offset these domestic lacunae, New Delhi has been shaking hands with geopolitically allied nations. Transitioning from a risk-laden importer of refined battery chemicals to a sovereign node in the global clean energy supply chain, India must move the needle beyond upstream MoUs and exploration rights to industrial realities.
Fig 1: A truck loads concentrated brine at SQM lithium mine at the Atacama salt flat, in Antofagasta region, Chile, May 3, 2023. REUTERS/Ivan Alvarado/File Photo
The Proliferation of Diplomatic Memoranda
The primary vehicle for India's overseas resource strategy is KABIL. A review of KABIL’s portfolio reveals a heavy reliance on early-stage exploration agreements that offer long-term promise due to the long-lead times of mine development but not immediate solutions to supply insecurity risks.
In Latin America's Lithium Triangle, KABIL signed an exploration and development agreement with CAMYEN, the state-owned enterprise of Argentina's Catamarca province, securing rights to five lithium brine blocks near Fiambalá.
While KABIL recently received environmental clearance from the Argentine government to initiate deep drilling and deploy temporary camps, official projections concede that commercial production will not commence until at least 2029. This highlights an underlying structural reality: mining projects possess a 10-to-15-year gestation period and time must be accounted for as it levies a cost on the project and long term security. In the same jurisdiction, established corporate players are leveraging Argentina's Large Investment Incentive Regime (RIGI) to execute massive production expansions, such as the Cauchari-Olaroz stage 2 project. A stock of the situation shows India's state-backed efforts here, in a major country of the lithium triangle, has remained confined to preliminary geological mapping without exploration rights.
India and Chile are in the decisive stages of negotiating a Comprehensive Economic Partnership Agreement (CEPA) to further deepen cooperation on copper, lithium, and rare earths. KABIL has signed an NDA with ENAMI, Chile's state-owned mining company, to evaluate opportunities in lithium exploration and extraction. Furthermore, Coal India Limited recently approved the creation of an intermediate holding company in Chile to ease the process.
Simultaneously, India has been actively pursuing upstream resource acquisition and exploration deals with a different set of resource-rich developing nations in its bid to diversify the import portfolio. In Africa, India has been negotiating a MoU with the Democratic Republic of Congo to secure supplies of cobalt and copper, and has already secured a massive 9,000-square-kilometre exploration deal in Zambia. India's diplomatic pitch to Ghana and Namibia emphasises capacity-building, digital public infrastructure, and sustainable joint ventures in line with Prime Minister Narenda Modi’s encouragement towards development cooperation models especially in India’s engagement with Global South nations.
India also recently signed an MoU on Cooperation in the Field of Geology and Mineral Resources with Mongolia, paving the way for technological exchange and collaboration in exporting Mongolia's key minerals, such as copper, to the Indian market.
Yet, this diplomatic flurry masks a severe structural lacuna: India's multilateral and bilateral partnerships remain overwhelmingly stalled in the early-stage phase. There is slow momentum in transforming these meaningful stakes and agreements towards actual, actionable development.
This is partly due to the institutional constraints of KABIL. It lacks independent financing capacity, relying instead on equity contributions from its parent public sector undertakings (which have limited midstream experience), and it possesses no systematic mechanism to co-invest alongside Indian private firms.
As a direct result, New Delhi is locked in a cycle of dialogue and preliminary geological mapping without formulating the crucial offtake agreements needed for processed minerals. In 2026, India's diplomatic strategy to secure critical minerals has indeed been characterised by a highly diverse array of international agreements spanning multiple continents and strategic objectives. This heterogeneous mix is evident in both the varying geopolitical profiles of the partner nations and the distinct types of frameworks being established.
Of these, Quad Critical Minerals Initiative Framework has garnered immense attention considering the signing of the India-US Critical Minerals Framework in the same week, where the latter focuses on cooperating across the supply chain in areas like processing, recycling, and investment coordination. The Quad Initiative countries - US, Japan, India, Australia- have agreed to mobilise up to USD 20 billion in public and private support. Earlier in the year, India formally joined the US-led Pax Silica coalition, a strategic network of nations committing to secure the entire silicon stack, from critical mineral mining to semiconductor fabrication, all aligned towards reducing exposure stemming from supply chain concentration and geopolitical fissures.
Taking forward the necessity of private sector involvement, a MoU was signed last week between JSC Giredmet, part of Russian nuclear major Rosatom's scientific division, and India's Nexon Geochem Pvt Ltd. for joint research and development of technologies for deep processing of raw materials containing rare and rare earth metals.
Midstream Concern
At the moment, India lacks commercial-scale processing facilities for key precursors like lithium carbonate, spherical graphite, and nickel sulphate. This vacuum forces India to rely directly on Chinese industrial monopolies, which control 60-70 % of global refining capacity for lithium, nickel, and cobalt, and a staggering 90 % for rare earth elements. This dependence translates directly into acute geopolitical vulnerability.
In April 2025, the Chinese government enacted sweeping export controls on heavy rare earth elements (including samarium and erbium) and permanent magnets, instituting a complex 45-day licensing regime. The impact on India was severe, given the nation's 81.3% reliance on Chinese permanent magnets for electric vehicle motors and defense guidance systems in 2024-25.
Setting the next stage
To bridge the long distance between an MoU and a functional mine, India must fundamentally restructure its critical minerals framework to prioritise the midstream chokepoint. Considering the new agreements signed, they can be leveraged very intelligently to prioritise India’s needs while balancing the expectations of the partner nations. In part two of this series, we will explore the actionable pathways across the critical mineral value chain that India can undertake specific to certain countries.
Meheli Roy Choudhury is a Research Associate at Centre for Climate Change and Energy Transition, Chintan Research Foundation. (Views are personal)
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