India's Mineral Diplomacy Strategy

Context:

As India aims to expand its manufacturing and technological capabilities, critical minerals are set to play a vital role in achieving this ambition.

Background:

India remains a major importer of critical minerals, heavily dependent on other countries, primarily China, for its mineral security. This dependency has raised strategic concerns for the nation.

Key Takeaways:

To address India’s mineral security challenges, New Delhi has embarked on a strategy of mineral diplomacy. This approach is built on two key pillars:

1. Developing international engagement with mineral-producing countries
2. Establishing strategic partnerships with intergovernmental organizations

1. Building Bilateral Ties with Resource-Rich Nations

India has prioritized forging ties with resource-rich countries to secure a reliable supply of critical minerals:

• Australia: In March 2022, KABIL (Khanij Bidesh India Ltd.) signed a Memorandum of Understanding (MoU) with Australia for a Critical Mineral Investment Partnership, identifying two lithium and three cobalt projects.
• Latin America’s Lithium Triangle (Argentina, Chile, and Bolivia):
  • India has shown significant interest in the region.
  • A $24 million lithium exploration pact was signed with a state-owned enterprise in Argentina for access to five lithium brine blocks.
  • KABIL is also working to secure mineral supplies by acquiring assets in Bolivia and Chile.
• Central Asia: India and Kazakhstan established a joint venture, IREUK Titanium Limited, to produce titanium slag in India, reflecting India’s growing focus on this resource-rich region.

2. Strengthening Multilateral and Minilateral Partnerships

The second pillar of India’s mineral diplomacy involves strengthening partnerships through multilateral and minilateral frameworks focused on mineral security. These include:

• Quad
• Indo-Pacific Economic Framework for Prosperity (IPEF)
• Mineral Security Partnership (MSP)
• G-7

These partnerships aim to foster cooperation in supply chain development and reduce vulnerabilities in critical mineral sourcing.

The Missing Pieces:

Despite significant progress, India’s mineral diplomacy still faces three critical challenges:

1. Lack of Private Sector Participation:

   • India’s private sector has remained largely absent from the critical mineral supply chain.
   • The primary reasons include:
     • The absence of a clear supply chain strategy
     • Lack of a defined roadmap for private sector involvement.

2. Weak Diplomatic Capacity:

   • India must strengthen its diplomatic engagement in mineral diplomacy.
   • Recommendations:
     • Establish a dedicated Mineral Diplomacy Division within the Ministry of External Affairs, similar to the New and Emerging Strategic Technologies (NEST) division.
     • Appoint mineral diplomacy specialists in selected key diplomatic missions to proactively identify opportunities and address challenges.

3. Insufficient Sustainable Partnerships:

   • India needs to build strategic, trusted, and sustainable alliances with key bilateral and multilateral partners.
   • Partnerships with nations such as the EU, South Korea, and Quad members are particularly critical due to their:
     • Technological expertise
     • Diplomatic reach
     • Domestic capabilities

Conclusion:

India’s mineral diplomacy is a strategic necessity to secure its position as a global manufacturing and technological leader. By addressing private sector participation, enhancing diplomatic capacity, and forging sustainable partnerships, India can significantly strengthen its mineral security while reducing its dependence on external players like China.