FICCI, in collaboration with Deloitte, has released a report highlighting the strategic importance of critical minerals and rare earth elements (REEs) in advancing India’s clean energy ambitions, industrial competitiveness and long-term economic security.

As India progresses towards 500 GW of renewable capacity, 30 per cent EV penetration by 2030 and net-zero by 2070, access to lithium, nickel, cobalt, graphite, copper and REEs will be essential to achieving these targets.

India’s demand for critical minerals is projected to rise sharply by FY30, driven by electric vehicles, energy storage systems, renewable energy, electronics and defence manufacturing.

Import dependence remains high:

• 100 per cent for lithium, cobalt and nickel
• Over 90 per cent for copper
• 60 per cent for natural graphite

Heavy REEs remain scarce domestically, and downstream processing capacity is constrained. Despite geological potential across several minerals, domestic production and processing capacity remain insufficient to meet projected demand.

Decarbonisation, electric mobility, battery storage and advanced manufacturing are increasing the mineral intensity of economic growth. Lithium, graphite and nickel are witnessing the fastest demand growth globally, supported by EV adoption and grid-scale energy storage expansion.

Global mining is concentrated in a limited number of countries, while refining and midstream processing are even more geographically concentrated. This increases exposure to export controls, geopolitical risks and price volatility.

For India, the primary constraint lies in midstream processing, particularly battery-grade chemicals, magnet materials and high-purity rare earth separation. Limited commercial-scale refining leads to value leakage and continued external dependence.

Rare earth elements such as neodymium and praseodymium are critical for permanent magnets used in EV motors and wind turbines. Nearly 80 per cent of REE consumption is linked to permanent magnets.

Although India has REE deposits, large-scale separation, refining and magnet manufacturing capacities remain limited, reinforcing import reliance.

The report recommends accelerated exploration, expansion of domestic processing hubs, strategic overseas asset acquisition, scaling up recycling and strengthening ESG standards. Focused implementation under the National Critical Mineral Mission can enable India to reduce import dependence and strengthen its position in global clean technology supply chains.