India Allocates $2 Billion To Boost Critical Minerals Sector

In a major move to strengthen its critical minerals sector, the Indian government has allocated $2 billion (₹16,300 crore) to accelerate mineral exploration and production. This initiative is crucial for India’s energy transition, industrial growth, and strategic resource security.

As global demand for lithium, rare earth elements, and other critical minerals surges, India is taking proactive steps to reduce dependence on imports and establish itself as a key player in the global supply chain. The investment includes ₹8,700 crore from the National Mineral Exploration Trust (NMET) and ₹4,000 crore from the Geological Survey of India (GSI), marking a major boost to domestic mineral exploration.

India Identifies 30 Critical Minerals for Strategic Growth

India has identified 30 critical minerals that are essential for various industries, including renewable energy, electric vehicles (EVs), electronics, and defense. These minerals include:

• Lithium: A key component for EV batteries and energy storage systems.
• Cobalt & Nickel: Essential for battery production and electronics.
• Rare Earth Elements (REEs): Crucial for electronics, aerospace, and clean energy technologies.
• Graphite & Vanadium: Used in advanced battery and industrial applications.

These minerals are vital for India’s goal of achieving self-reliance in energy and manufacturing, reducing dependence on imports from countries like China and Australia.

Government’s Investment Plan for Critical Minerals

The ₹16,300 crore investment will focus on mineral exploration, processing, and development.

Breakdown of the Investment

1. ₹8,700 Crore – National Mineral Exploration Trust (NMET)
   • Funds allocated for detailed mineral surveys and resource mapping.
   • Focus on identifying potential lithium reserves and other critical minerals.
2. ₹4,000 Crore – Geological Survey of India (GSI)
   • Strengthening geological research and mineral discovery initiatives.
   • Supporting the exploration of offshore mineral reserves.
3. $300 Million Initial Allocation (Awaiting Approval)
   • Aimed at accelerating India’s first offshore mineral auctions.
   • Expanding mining capabilities to ensure long-term resource availability.

These investments align with India’s vision of “Atmanirbhar Bharat” (Self-Reliant India), promoting domestic mining to meet growing industrial demands.

India’s First Offshore Mineral Auctions

As part of its strategy to secure critical minerals, India is set to conduct its first offshore mineral auctions. This initiative will:

• Unlock untapped mineral resources in India’s exclusive economic zones.
• Attract domestic and foreign investment in mining and resource development.
• Enhance India’s global standing in the mineral and mining sector.

The upcoming offshore auctions will focus on high-value minerals such as lithium, cobalt, and rare earth elements, which are crucial for India’s clean energy and technology sectors.

Why This Investment is Crucial for India’s Future?

1. Strengthening Energy Security

India is rapidly shifting towards renewable energy and electric vehicles. The availability of domestic lithium and cobalt will reduce reliance on imports and support the Make in India initiative.

2. Boosting Industrial Growth

Critical minerals are essential for industries like:

• Electronics and Semiconductors
• Aerospace and Defense
• Battery Manufacturing and EV Production

3. Reducing Import Dependence

Currently, India imports over 80% of its lithium and other critical minerals. Developing domestic reserves will improve supply chain stability and cost efficiency.

4. Enhancing Global Competitiveness

With a strong mineral exploration and processing ecosystem, India can become a leading player in the global battery and clean energy supply chain.

India’s Growing Focus on Sustainable Mining

To ensure environmentally responsible mining, the government is promoting:

• Green Mining Technologies: Using low-impact extraction methods to protect ecosystems.
• Recycling Initiatives: Developing battery recycling and metal recovery technologies.
• Sustainable Policies: Implementing strict environmental regulations for mining operations.

These efforts align with India’s commitment to net-zero carbon emissions and sustainable resource management.

India’s Vision for the Critical Minerals Sector

India’s $2 billion investment in the critical minerals sector marks the beginning of a new era in mineral self-sufficiency. Key future initiatives include:

1. Expanding Lithium Reserves
   • Exploring lithium deposits in Karnataka, Rajasthan, and Jammu & Kashmir.
   • Collaborating with global mining companies for technology transfer.
2. Advancing Mineral Processing Capabilities
   • Setting up new processing plants for rare earth elements and lithium refining.
   • Encouraging public-private partnerships (PPPs) in mineral development.
3. Scaling Up Offshore Mining Operations
   • Conducting deep-sea explorations for untapped mineral resources.
   • Implementing advanced geophysical surveys for efficient resource mapping.

With a clear roadmap and strong policy support, India is set to become a major hub for critical mineral production and processing.

India’s decision to allocate $2 billion (₹16,300 crore) to the critical minerals sector is a transformative step toward energy security, industrial growth, and self-reliance. By investing in lithium, rare earth elements, and other key minerals, the government is ensuring that India remains competitive in the global clean energy and technology markets.

As India gears up for its first offshore mineral auctions, this strategic investment will pave the way for sustainable mining, reduced import dependency, and a robust domestic supply chain for future industries.