Carbon neutrality mission: India’s clean energy future hinges on access to critical minerals

In early 2025, a series of disruptions exposed how vulnerable these supply chains are. Export restrictions widened across multiple minerals, including rare earth elements and battery metals. The Democratic Republic of Congo, the world’s dominant cobalt supplier, temporarily suspended exports to stabilize prices. Meanwhile, China tightened controls on several critical inputs.

These moves were not isolated. More than half of all key energy minerals are now subject to some form of export control, according to the International Energy Agency (IEA), underscoring just how quickly markets can tighten when geopolitics intervenes.

The result was not a sustained shortage, but something more instructive. It was a supply shock in slow motion. Prices had already swung wildly. Lithium prices rose eightfold in 2021-22 before falling sharply, only to face renewed uncertainty as investment slowed and policy risks rose. The lesson is clear. Even when markets appear well supplied, they are structurally fragile.

For India, this matters more than for most economies. A report by Niti Aayog has highlighted near-total import dependence for several critical minerals, including lithium and cobalt, at a time when demand is set to surge. Lithium demand alone could grow fivefold by 2040, while copper demand could rise by around 30%. These are not marginal increases. They represent a structural shift in how economies consume resources.

The economic implications are immediate. Batteries are the most expensive component of EVs. If mineral prices spike, EV affordability suffers. If supplies are delayed, manufacturing slows. If imports rise sharply, the macroeconomic impact follows through trade deficits, currency pressure and industrial vulnerability.

A prolonged supply shock could raise battery costs globally by as much as 40-50%, widening the gap between countries that control supply chains and those that do not.

This is why the global race for critical minerals is intensifying. Countries are no longer treating them as commodities, but as strategic assets. Resource nationalism is on the rise. Strategic reserves are being built. Long-term supply agreements are being locked in.

The geography of supply is becoming more concentrated even as demand spreads. By 2035, the top three producers are expected to dominate most mineral supply chains, reinforcing concentration risk.

India has begun to respond. Over the past year, it has stepped up efforts to secure overseas resources, including agreements with Brazil and Argentina to access lithium and other minerals. It has also expanded engagement with Australia and Africa. These moves signal a shift from passive import dependence to active resource diplomacy. But these efforts are still at an early stage, and the scale of the challenge is much larger.

The constraint is not just access to raw materials. It is the entire value chain. Mining is only the first step. Processing and refining are even more concentrated, with China dominating large parts of this ecosystem. Without capabilities in these stages, India risks remaining dependent even if it secures upstream supply. This is the less visible bottleneck, but arguably the more important one.

There is also a structural mismatch in how the transition is being planned. Policy discourse continues to focus on targets like renewable capacity, EV penetration and hydrogen output.

These are necessary, but they assume that material supply will follow. That assumption is increasingly untenable. Critical minerals are not like oil, where global markets are deep and relatively liquid. They are smaller, more concentrated and more volatile.

Supply cannot be ramped up quickly, especially for minerals such as copper, where new projects take years to develop even as a 30% supply deficit is projected by 2035.

This is not a call to slow the transition, but to secure it. India needs to move from its procurement orientation to a strategy mindset.

This means long-term offtake agreements, equity investments in overseas mining assets and a coordinated approach to resource diplomacy. It also means building domestic capacity in refining and processing, even if it takes time and capital. It means creating strategic reserves to manage shocks. Further, it means that Indian industry, not just the government, must participate in the scramble for resources.

The energy transition is often framed as a shift from fossil fuels to clean power. In reality, it is also a shift from fuels to critical materials.

For India, the question is no longer whether it can build renewable capacity or expand electric mobility. It is whether it can secure the materials that enable both. The answer will shape not just the pace of India’s transition, but its economic and strategic outcomes.

The author is an independent expert based in New Delhi, Kolkata and Odisha. Twitter: @scurve Instagram: @soumya.scurve.