Highlights

• India's lithium and graphite demand could rise tenfold by the mid-2030s to support EV adoption and renewable energy expansion.
• Domestic mining regime failures are creating structural supply vulnerabilities.
• Auction-based licensing has distorted incentives, stranded assets, and weakened exploration despite India holding domestic mineral reserves, making import dependence a long-term reality.
• Diversification strategy prioritizes stable partners like Australia and Canada.
• India competes with the US, Europe, and China for finite upstream assets with less processing capacity and slower execution.

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India’s race toward net zero by 2070 has a quiet but decisive bottleneck: minerals. A new policy report from CETEx at the London School of Economics, Options for Diversifying India’s Critical Mineral Supply Chains (opens in a new tab), lays out the scale of the challenge with unusual clarity—and little comfort. As India electrifies transport, expands renewable energy, and modernizes its power grid, demand for lithium, cobalt, nickel, copper, graphite, and rare earth elements will rise by multiples, not margins.

The Numbers That Matter

The report’s core finding is solid and well-grounded: electric vehicles dominate future mineral demand. Under conservative International Energy Agency scenarios, India’s lithium and graphite demand could rise more than tenfold by the mid-2030s, while cobalt and nickel requirements multiply several times over. Copper demand also surges, driven by solar deployment, grid expansion, and EV wiring. Rare earth elements—critical for permanent magnets in motors and wind turbines—show steep growth despite smaller absolute volumes.

These projections align with global benchmarks and with what Rare Earth Exchanges tracks across magnet and downstream manufacturing supply chains. There is no exaggeration here. India’s energy transition is mineral-intensive by design.

Policy Friction at Home

Where the report is most incisive is its critique of India’s domestic mining regime. Auction-based licensing, introduced with good intentions, has distorted incentives. Exploration risk is poorly rewarded, composite licenses are constrained to brownfield sites, and irrational bidding has stranded assets. The result is predictable: weak exploration, limited processing capacity, and continued import dependence—even for minerals India nominally holds.

This diagnosis is credible and widely shared across the industry. The report avoids the comforting fiction that modest policy tweaks will unlock domestic supply quickly. With average mine lead times approaching 18 years, India’s vulnerability is structural, not cyclical.

Diversification Abroad—With Eyes Open

The authors’ diversification map is pragmatic rather than ideological. Low-risk jurisdictions such as Australia, Canada, and Finland emerge as anchor partners, offering regulatory stability, multi-metal portfolios, and existing trade relationships. Higher-risk but resource-rich countries—Brazil, Chile, and the Philippines—are positioned as necessary complements, provided India deploys risk-mitigation tools such as long-term offtake agreements, equity participation, and multilateral guarantees.

There is little geopolitical wish-casting here. Risk is acknowledged rather than obscured—a welcome contrast to more triumphalist policy narratives.

What’s Notable for Rare Earth Supply Chains

The understated takeaway is this: India is competing for the same finite upstream assets as the United States, Europe, China, and Japan—but with less processing capacity and slower execution. Diversification is not about “friend-shoring” slogans. It is about capital, contracts, and speed.

REEx Take

This report is accurate, sober, and refreshingly unsentimental. It does not overpromise self-reliance, nor does it minimize China-centric supply risks. Its bias, if any, tilts toward caution—and in today’s critical minerals markets, caution is realism. For investors and policymakers, the message is blunt: India’s clean-energy future depends on decisions made now, far upstream of factories, batteries, and gigawatts.

Source: Martínez JP, Bansal K, Sivamani G (2025), Options for Diversifying India’s Critical Mineral Supply Chains, (opens in a new tab) CETEx–LSE.

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