India Launches $4.1 Billion Mission to Secure Critical Minerals: A Strategic Push for Energy Transition

In January 2025, India launched the National Critical Mineral Mission (NCMM), a $4.1 billion initiative (Rs 34,300 crore) to secure critical minerals essential for its clean energy transition, high-tech industries, and national security. Approved by the Union Cabinet, the mission aims to reduce India’s heavy reliance on imports, particularly from China, for minerals like lithium, cobalt, nickel, and rare earth elements (REEs). With a seven-year plan (2024-25 to 2030-31), the NCMM focuses on boosting domestic exploration, acquiring overseas assets, enhancing recycling, and fostering innovation to support India’s net-zero emissions goal by 2070 and its ambitious 500 GW renewable energy target by 2030. This article explores the drivers behind the mission, its historical context, future projections, and its transformative impacts across sectors, with a focus on Tamil Nadu’s role in mineral exploration and processing.

Why This Mission Matters

Critical minerals are vital for clean energy technologies, such as electric vehicle (EV) batteries, solar panels, and wind turbines, as well as defense, aerospace, and telecommunications. India’s 100% import dependency on lithium, cobalt, and nickel, and 60% for graphite, exposes it to supply chain vulnerabilities amid global competition, particularly with China controlling 60-80% of global mineral processing. The NCMM positions India to build a resilient supply chain, reduce trade deficits, and create economic opportunities, with Tamil Nadu’s coastal and mineral-rich regions playing a key role in offshore exploration and processing.

Latest Developments Driving the Mission

The NCMM, announced in the 2024-25 Union Budget and approved on January 29, 2025, allocates Rs 16,300 crore ($1.9 billion) from the government and expects Rs 18,000 crore ($2.2 billion) from public sector undertakings (PSUs) and private investors over seven years. The mission responds to soaring demand for critical minerals, with copper demand projected to grow sixfold and nickel elevenfold by 2047, driven by India’s EV and renewable energy ambitions.

Key Highlights of the Mission

• Exploration and Mining: The Geological Survey of India (GSI) will undertake 1,200 exploration projects by 2030-31, with 195 ongoing in 2024-25 and 227 planned for 2025-26. Over 100 critical mineral blocks, including lithium in Jammu & Kashmir and Tamil Nadu, will be auctioned.
• Overseas Acquisitions: Khanij Bidesh India Limited (KABIL) secured 15,703 hectares in Argentina’s Catamarca province for lithium mining in January 2024 and is exploring assets in Australia, Chile, and Russia.
• Recycling and Processing: Rs 1,500 crore is allocated for recycling initiatives, targeting 75,000 tonnes of lithium-ion battery recycling annually. Four mineral processing parks will be established, with Tamil Nadu as a potential hub due to its industrial infrastructure.
• Regulatory Reforms: Amendments to the Mines and Minerals (Development and Regulation) Act, 1957, in 2023 allow private sector participation in exploration, with a fast-track approval process and customs duty exemptions on mineral scrap introduced in February 2025.
• Research and Innovation: Rs 500 crore is earmarked for R&D, with three Centres of Excellence on Critical Minerals and support for 1,000 patents by 2031, fostering collaboration with institutions like IITs and IISc.

Tamil Nadu’s Role

Tamil Nadu, with its coastal access and industrial base, is poised to contribute significantly to offshore mineral exploration, particularly for polymetallic nodules containing cobalt, nickel, and REEs. The state’s renewable energy sector, led by companies like Vikram Solar, aligns with the mission’s goals, while Chennai’s manufacturing hubs support processing park development.

Historical Context of India’s Critical Mineral Strategy

India’s critical mineral efforts have gained momentum since the early 2020s, driven by global supply chain disruptions and the clean energy transition. Historically reliant on imports, India has progressively reformed its mining sector to address vulnerabilities.

Key Milestones in Critical Mineral Policy

• 2019: KABIL was formed as a joint venture of state-run miners (NALCO, HCL, and MECL) to secure overseas mineral assets, starting with lithium and cobalt.
• 2022: The Ministry of Mines identified 30 critical minerals, including lithium, cobalt, copper, nickel, and REEs, critical for energy, defense, and tech sectors.
• 2023: Amendments to the MMDR Act enabled private sector exploration and auctioned 24 strategic mineral blocks. GSI shifted focus to deep-seated minerals, completing 368 exploration projects.
• 2024: The Economic Survey highlighted India’s import dependency on China, prompting the NCMM announcement in the Union Budget. Customs duties on critical minerals were eliminated to boost domestic processing.
• 2025: The NCMM’s launch, with Rs 34,300 crore investment, marks a comprehensive strategy, including offshore exploration and strategic stockpiling.

This timeline reflects India’s shift from import reliance to a proactive strategy for mineral self-reliance, with Tamil Nadu emerging as a key exploration hub.

Future Scopes and Projections

The NCMM aims to ensure domestic production of 15 critical minerals, including lithium, graphite, and REEs, by 2030-31, while acquiring 50 overseas mining assets. Analysts project India’s critical mineral market to grow to $20 billion by 2030, driven by EV adoption (30% of vehicles by 2030) and renewable energy expansion. Tamil Nadu’s offshore exploration could yield significant cobalt and nickel deposits, supporting local battery manufacturing.

Long-Term Strategic Outlook

By 2035, India aims to reduce import dependency for lithium and cobalt by 50%, with domestic processing parks handling 20% of global REE refining. The mission’s focus on recycling could position India as a circular economy leader, with Tamil Nadu’s industrial base supporting battery recycling initiatives. International partnerships, such as the Mineral Security Partnership (MSP) and India-Australia collaborations, will enhance access to global reserves.

Potential Challenges

• Limited Domestic Reserves: India lacks significant deposits of lithium, cobalt, and nickel, requiring heavy investment in exploration and overseas acquisitions.
• Geopolitical Risks: Dependence on countries like Argentina and Australia for assets could face disruptions due to global tensions or US tariffs.
• Environmental Concerns: Mining activities risk habitat destruction and water pollution, necessitating a green mining policy to balance ecology and extraction.
• Technology Gaps: India’s limited refining capacity and lack of advanced mining technologies could delay commercialization, with projects taking over a decade to mature.

Impacts on the Indian Economy and Stakeholders

The NCMM is a game-changer for India’s economy, reducing import costs, boosting GDP, and creating jobs. Tamil Nadu’s role in exploration and processing will amplify regional economic gains, particularly in clean energy and manufacturing.

Sector-Wise Impacts

Renewable Energy and Electric Vehicles

• Impact: Securing lithium, cobalt, and nickel will accelerate EV battery production and support 280 GW of solar capacity by 2030, with Tamil Nadu’s solar firms like Vikram Solar benefiting.
• Economic Contribution: The sector could add Rs 10,000 crore to GDP, with Tamil Nadu contributing 15% through renewable energy manufacturing.
• Business Opportunities: Battery manufacturers like Ola Electric and recycling firms will see growth, with Tamil Nadu’s ports facilitating mineral trade.

Defense and Aerospace

• Impact: Minerals like titanium, beryllium, and REEs will strengthen India’s defense capabilities, supporting projects like the AMCA fighter jet and ISRO’s Gaganyaan mission.
• Economic Contribution: Defense manufacturing could grow by Rs 5,000 crore, with Tamil Nadu’s aerospace hubs gaining from local processing.
• Business Opportunities: Defense contractors and tech firms will secure contracts for mineral-intensive components, boosting Tamil Nadu’s industrial clusters.

Technology and Telecommunications

• Impact: Gallium, indium, and silicon will support India’s $1 trillion digital economy and 5G/6G rollout, with Chennai’s IT sector driving demand.
• Economic Contribution: The tech sector could add Rs 8,000 crore to GDP, with Tamil Nadu’s IT exports rising 5%.
• Business Opportunities: Semiconductor firms and startups in Tamil Nadu will benefit from R&D funding and processing park investments.

Mining and Processing

• Impact: The mission’s 1,200 exploration projects and four processing parks will create 50,000 jobs, with Tamil Nadu’s coastal regions supporting offshore mining.
• Economic Contribution: Mining could contribute Rs 7,000 crore to GDP, with Tamil Nadu gaining Rs 1,000 crore from exploration and refining.
• Business Opportunities: Mining equipment suppliers and processing firms will see demand, with KABIL’s overseas ventures creating export opportunities.

Financial Markets and Investment

• Impact: Mining stocks like Hindalco and GMDC rose 3% post-NCMM launch, with investor interest in PSU miners like Coal India growing.
• Economic Contribution: The mission could attract $5 billion in foreign investment, with Tamil Nadu’s renewable sector drawing 10% of funds.
• Business Opportunities: VC funds and green bonds will target mineral-focused startups, with Tamil Nadu’s firms leveraging SEBI’s Innovators Growth Platform.

Critical Minerals and Applications

This table highlights key minerals and Tamil Nadu’s strategic contributions.

Frequently Asked Questions (FAQs)

What is the National Critical Mineral Mission?

Launched in January 2025, the NCMM is a $4.1 billion initiative to secure critical minerals through domestic exploration, overseas acquisitions, recycling, and R&D, aiming for self-reliance by 2030-31.

Why is India focusing on critical minerals?

Critical minerals like lithium, cobalt, and REEs are essential for EVs, renewables, and defense, with India’s 100% import dependency exposing it to supply chain risks, particularly from China.

How does Tamil Nadu contribute to the mission?

Tamil Nadu supports offshore exploration for minerals like cobalt and nickel, hosts processing parks, and leverages its renewable energy sector to drive mineral demand.

What are the mission’s challenges?

Limited domestic reserves, geopolitical risks, environmental concerns, and technology gaps could delay commercialization and increase costs.

How will the mission impact India’s economy?

It will reduce import costs by $2 billion annually, create 50,000 jobs, and add Rs 30,000 crore to GDP, with Tamil Nadu contributing significantly through exploration and processing.