The strategic race India can’t lose

The growing significance of critical minerals like lithium, cobalt, rare earths, and others in modern technologies is becoming central to geopolitics, particularly in the context of the Russia-Ukraine war. As countries like the US and China vie for control over these resources, India faces a crucial need to secure its own access to these materials for future technological and manufacturing growth.

Geoeconomics of Critical Minerals

• Critical Minerals as New Oil: Unlike the past, where oil influenced geopolitics, critical minerals such as lithium, cobalt, and rare earths have become essential due to their importance in electric vehicles, renewable energy, and high-tech manufacturing. These resources are now a significant factor in determining global power dynamics.
• US Dependence on Critical Minerals: The US, despite its success in achieving energy independence through oil and gas, remains highly dependent on imports for critical minerals, with China holding dominance over key rare earth resources. This dependence makes the US vulnerable in the ongoing technological race with China.
• Ukraine’s Strategic Importance: Ukraine possesses significant reserves of lithium, graphite, and rare earths, crucial for battery technology and high-tech industries. Its resources offer leverage to the US, as it faces fierce competition with China over access to these materials.

The Strategic Race between US and China

• Technological Competition: While the US remains a leader in certain areas, China has gained a competitive edge in sectors like electric vehicles and artificial intelligence, challenging US dominance. This intensifies the need for the US to secure its supply chains for critical minerals, reducing reliance on non-friendly nations.
• US Leverage in Ukraine: In the geopolitical race, the US sees Ukraine’s rich critical mineral resources as key to countering China’s influence. The ongoing conflict with Russia provides the US with more leverage to access Ukraine’s mineral wealth than other potential territories like Greenland or Canada.
• India’s Geopolitical Position: India is increasingly focusing on securing its own supply of critical minerals through international agreements. However, it faces significant challenges in domestic exploration, as it is heavily dependent on imports for these essential resources.

The Path to India’s Self-Reliance in Critical Minerals

• India's Import Dependence: India relies heavily on imports for critical minerals, including components for solar and wind power infrastructure, batteries, and electric vehicles. This dependence could pose a challenge to its manufacturing ambitions if not addressed.
• Potential in Domestic Exploration:   India has significant geological resources but lacks sufficient exploration and monetization of its reserves. To become less vulnerable, India needs to liberalize its exploration sector and encourage private investments in the discovery of critical minerals.
• Government’s Role in Securing Resources: While India has been signing agreements with friendly nations, it must also focus on increasing domestic production. By liberalizing mineral exploration and utilizing its geological potential, India can reduce its vulnerability to global supply chain disruptions.

Practice Question:

Q. Discuss the strategic importance of critical minerals in the geopolitics of the 21st century, focusing on the challenges faced by India in securing its supply and the steps it can take to reduce its dependency on imports.