Interventions by the Indian Government to Strengthen Critical Minerals Sector

Lithium, metal that is critical for the global transition to clean energy, primarily powering rechargeable lithium-ion batteries for electric vehicles, renewable energy storage, and portable electronics.

Due to its light weight and high electrochemical potential, lithium allows for smaller, lighter, and more efficient batteries.

While India has made substantial progress in its clean energy transition, renewable energy adoption, and the growth of electric vehicles, its high import dependence on lithium and other critical minerals is a cause of serious concern.

The entire current demand of lithium-ion batteries used in electric vehicles is met through imports, making the sector sensitive to external shocks.

Recent policy developments in China, specifically the decision to impose export controls and licensing requirements on high-performance Lithium-ion batteries (≥300 Wh/kg), could tighten near-term global supply conditions.

This creates potential supply-chain vulnerability for Indian EV manufacturers who rely on Chinese midstream processing. 

Lithium and other critical raw materials are globally traded commodities, and their prices are influenced by international demand and supply conditions. Any global policy changes or supply disruptions may lead to price fluctuations.

The export controls announced by China could raise global component prices in the near term, directly affecting the cost structure of Indian EV companies. 

In recent months, the Indian government has introduced multiple initiatives to strengthen the country’s critical mineral sector and reduce dependence on lithium imports.

Policy Interventions by the Indian Government to Reduce Import Dependence for Critical Minerals

In January 2024, Khanij Bidesh India Limited (KABIL), under the Ministry of Mines, signed an agreement with CAMYEN, a state-owned enterprise of the Catamarca province of Argentina.

The agreement covers the exploration and mining of five Lithium Brine Blocks in Argentina, totalling about 15,703 hectares and located in the Catamarca province.

In January, 2025, the government approved the National Critical Mineral Mission (NCMM) to secure a long-term, sustainable supply of critical minerals (including lithium) and to strengthen India’s critical mineral value chain.

NCMM encompasses all stages from mineral exploration and mining to beneficiation, processing, and recovery from end-of-life products.

Under the NCMM, the Government has recognised nine premier institutes as Centres of Excellence (CoEs) to conduct Research & Development to strengthen domestic capabilities in the critical mineral value chain.

Furthermore, since the amendment to the MMDR Act in 2023, the Government has successfully auctioned 46 blocks of critical and strategic Minerals. In addition, 7 blocks have been auctioned under the Exploration Licence regime, out of which 3 are critical mineral blocks.

In October 2025, the government approved an incentive scheme of Rs 1,500 crore to promote the recycling of critical minerals. A month later, guidelines for funding pilot projects to recover critical minerals from overburden, tailings, fly ash, and red mud were issued.