Minding The Minerals Gap

In light of the Quad's new Critical Minerals Initiative, the editorial explores India's participation in minilateral groupings or "minerals clubs" to secure strategic resources essential for its green energy ambitions. It examines the challenges India faces and suggests how such engagements can be made more strategic and sustainable.

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Context

  • In light of the Quad's new Critical Minerals Initiative, the editorial explores India's participation in minilateral groupings or "minerals clubs" to secure strategic resources essential for its green energy ambitions. It examines the challenges India faces and suggests how such engagements can be made more strategic and sustainable.

Background

  • Critical minerals like lithium, cobalt, and rare earths are essential for green technologies (e.g., EVs, solar panels, batteries).
  • India heavily depends on China for these imports, making it geopolitically vulnerable
  • India has begun forming bilateral and multilateral partnerships for mineral security, e.g., with Argentina, Zambia, UAE, and through Quad & MSP (Minerals Security Partnership).
  • Launch of Critical Minerals Initiative by Quad members marks a new collaborative model for resilient supply chains.

Quad Critical Minerals Initiative

  • Launch: Announced at the 2nd Quad Foreign Ministers' Meeting in Washington, DC. 
  • Participants: Foreign Ministers of India, USA, Australia, and Japan.
  • Objective: To enhance cooperation for secure and diversified critical mineral supply chains.
  • Strategic Goals: Reduce Dependency: Minimize reliance on a single country (notably China) for mineral processing and refining.
  • Mitigate Risks: Address threats like economic coercion, price manipulation, and supply chain disruptions. 

Challenges Highlighted 

  • Strategic Dependence on China: Recent Chinese export controls on rare earths exposed India's vulnerabilities.
  • Limited Domestic Capability: Indian firms lack advanced extraction technologies and financing capacity. Hesitation to invest in politically unstable countries.
  • Processing without Raw Materials: Risk of creating stranded processing hubs without assured mineral supply. Potential for India to be used only as a storage/transit centre rather than a high-value producer.
  • Geopolitical & Trade Uncertainty: "Friendly stockpiling" models may be derailed by leadership changes (e.g., protectionist policies like under Trump).
  • Tech Transfer Rights Barriers: Historical reluctance of the West to share tech/IP with the Global South. Risk of becoming a passive market for finished goods, not an innovation hub.

Way Forward

  • Strategic Engagement in Clubs: India must align partnerships with national priorities and avoid low value roles.
  • Secure Long-term Supply: Ensure bilateral/minilateral agreements provide assured access to raw materials.
  • Technology & IP Negotiation: Push for clauses supporting tech transfer, academic exchanges, and R&D investments.
  • Build Domestic Capability: Scale up local refining, processing, recycling, and clean-tech manufacturing.
  • Leverage Diaspora & Global South Networks: Use India's influence in Africa and Southeast Asia to build trusted partnerships.
  • Champion ESG Discourse: Lead on ESG norms from a Global South perspective to avoid Western imposition.
  • Institutional Safeguards: Include reciprocal obligations and protection mechanisms in international trade deals.


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