India is facing a pressing challenge in securing its future economic growth and industrial stability: a heavy reliance on single-country suppliers for essential critical minerals. Much like its past efforts to diversify oil and gas sources, the nation now confronts significant concentration risks in its mineral imports, making it vulnerable to global geopolitical shifts and protectionist trade policies.
High Stakes in Critical Mineral Supply
A recent analysis by the Institute for Energy Economics and Financial Analysis (IEEFA), titled ‘India’s critical mineral imports in 2025 and a shift towards supply diversification,’ underscores this vulnerability. The study examined import data for five key minerals—cobalt, copper, graphite, lithium, and nickel—and their compounds, revealing a concerning dependency on a limited number of sources.
Currently, India is 100% import-dependent for lithium, cobalt, and nickel, which are vital for sectors ranging from electric vehicles (EVs) and renewable energy storage to power generation and transmission.
Key Dependencies Revealed
- Overall Supplier: Chile stands as India’s largest overall supplier of critical minerals, primarily driven by copper ore imports, accounting for 2.8 million tonnes between FY19 and FY25. China also remains a systemically important supplier.
- Cobalt: Essential for lithium-ion battery cathodes, Finland dominates India's cobalt oxide and hydroxide imports, supplying nearly 60% in FY25.
- Copper: Crucial for electrification and infrastructure, Tanzania provides over 50% of India’s copper ore and concentrate imports, emerging as a significant trade partner.
- Nickel: Used in rechargeable battery cathodes, Australia has become a major supplier, making up 65% of nickel oxides and hydroxides imports, while Belgium accounts for over 65% of nickel sulphate imports.
The Imperative for Diversification
The need for India to diversify its critical mineral imports is driven by several factors. Major producing and processing nations, including China, Indonesia, the US, the European Union, and Japan, are increasingly adopting protectionist and industrial policies. These include export controls, domestic value-addition requirements, and strategic supply management, which are reshaping global trade flows and exposing India’s susceptibility to supply disruptions.
Saloni Sachdeva Michael, Lead Energy Specialist for India Clean Energy Transition (South Asia) at IEEFA, emphasizes the gravity of the situation: "Reserves and processing capacity for these minerals remain highly concentrated, while recent trends of export restrictions, resource nationalism, and onshoring or friend-shoring policies are fragmenting global markets that India relied upon. The consequences are price volatility, supply disruptions, and reduced availability, affecting import-dependent economies like India the most."
India's Strategic Response
India's import data already reflects a clear intent to broaden its supply sources and build more resilient supply chains through enhanced international cooperation. The government is actively pursuing diplomatic, trade, and collaborative efforts to mitigate supply risks.
Beyond simply sourcing minerals, there is a growing recognition of the need for deeper collaboration in areas such as skills development, joint exploration and mining ventures, technology transfer, and scaled research and development. These proactive measures are crucial for safeguarding India's economic future and ensuring stable access to the minerals essential for its burgeoning industries.