Amid rising supply risks, India weighs building six-month critical minerals reserves to safeguard clean energy, electronics and mobility sectors from global disruptions and price volatility.
India is considering creating a strategic reserve of critical minerals equivalent to six months of domestic demand to shield key industries from supply disruptions and price volatility, according to a report by Mint.
Officials from the Union ministries of mines and heavy industries are said to be working on a framework to stockpile both imported and locally sourced minerals, including lithium, cobalt, nickel, copper and rare earth elements.
These materials are essential for sectors such as electric mobility, renewable energy storage and electronics manufacturing, all of which are increasingly reliant on imports.
Sources cited in the report indicated that discussions with industry stakeholders have begun, focusing on the structure and necessity of maintaining such a buffer. The reserve is expected to combine domestic sourcing with overseas procurement.
The move reflects growing concerns over global supply chain vulnerabilities, particularly given China’s dominant position in the sector. China accounts for a significant share of global rare earth production and processing capacity, raising risks for countries dependent on external supplies.
These concerns intensified following last year’s export restrictions on rare-earth magnets by China amid trade tensions with the United States, which disrupted global supply chains. In response, India announced incentives to strengthen domestic rare earth processing capabilities.
Analysts say the proposed reserve could reduce exposure to external shocks and improve supply security. The Mint report stated that building such reserves would help India reduce dependence on overseas suppliers, particularly amid geopolitical uncertainties.
Global precedents exist, including the United States’ National Defense Stockpile and similar reserves maintained by China and South Korea.
Demand for critical minerals in India is projected to rise sharply, driven by growth in electric vehicles (EVs) and energy storage. However, challenges remain, including import dependence and the time required to scale up domestic mining and processing capacity.
The initiative aligns with broader efforts to strengthen supply chains under the National Critical Minerals Mission and expand overseas sourcing through Khanij Bidesh India Ltd.
