India's Critical Mineral Supply Chain Vulnerable to China's Processing Dominance
India relies heavily on critical mineral imports. Global supply chains are tightening due to economic nationalism, creating a strategic challenge for the nation.
New Strategic Resources
India faces a critical challenge securing essential minerals. These resources now underpin technological and energy shifts, much like oil defined the last century. Climate imperatives make fossil fuel dependence unsustainable. Geopolitics also exposes oil as a strategic weakness. This drives a historic shift from hydrocarbons to minerals. However, markets are not open.
Instead, controlled supply chains, strategic alliances, industrial policy, and economic nationalism define "critical mineral mercantilism".
India's Import Reliance
Critical minerals, including copper, lithium, and rare earth elements, are vital inputs for solar panels, electric vehicles, and semiconductors. Countries now compete for control over entire value chains: from mining to processing and manufacturing. This contrasts with past energy security concerns. India faces deep import reliance in this unstable environment. A study by Animesh Ghosh and Soumit Pandey highlights this complex dependency.
Segmented Supply Chains
The authors' study reveals India's import portfolio divides into three segments. Ores and concentrates come from resource-rich nations like Australia and Chile. Intermediate and finished products are processed in industrial hubs; China, Japan, and South Korea dominate this segment. Recycled materials follow different trade networks, with China and Russia as key players. This segmentation shows mineral security requires control over value chains, not just resource access.
China controls roughly 90 per cent of rare earth processing, alongside significant shares in lithium, cobalt, and graphite value chains. This reflects a strategy of securing overseas mining assets and building dominant domestic processing capacity. India's challenge is temporal. Developing domestic mining and processing takes over 15 years.
While India's circular economy efforts are nascent, demand for critical minerals is accelerating this decade. Imports are India's immediate solution, yet they represent its biggest vulnerability. International initiatives like the Forum on Resource Geostrategic Engagement (FORGE) aim to diversify supply chains. This seeks to reduce reliance on concentrated processing hubs for Asian businesses.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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