Indian Council of World Affairs

Abstract: Critical minerals are crucial for clean energy transitions, and the global competition for them is increasingly shaping geopolitical dynamics. Critical minerals are also essential to achieve national and international climate goals, as they are key inputs to technologies such as renewable energy systems and electric vehicles. In recent years, cooperation in critical minerals has become an emerging area in India–Australia relations. This article examines the implications of India-Australia cooperation in critical minerals for India’s EV transition. It emphasises the necessity of certain critical minerals required for electric vehicle manufacturing and evaluates the associated supply chain risks. It further explores opportunities in the existing India-Australia critical mineral cooperation to develop a resilient supply chain. 

Introduction 

India’s transition towards electric mobility has become a significant component of its broader industrial development strategy, clean energy agenda, and decarbonisation objectives. It is further driven by India’s ambition of 30 per cent electric vehicle (EV) penetration by 2030.[i] Additionally, it also supports India’s climate commitments announced at COP26, including its pledge to achieve net-zero emissions by 2070.[ii] Critical minerals are often described as the ‘new oil’ of the 21st century. Due to their import dependence and resulting supply chain vulnerability, recognising the strategic importance, the Government of India has identified 30 critical minerals that are essential for economic and technological security, among which lithium, cobalt, nickel, graphite, and rare earth elements (REEs) are indispensable components of EV batteries.[iii] Notably, the Indian EV battery market is gradually shifting from nickel-manganese-cobalt (NMC) to lithium-iron-phosphate (LFP) battery chemistry due to the lower cost and improved thermal resistance of LFP. Consequently, lithium has assumed greater strategic importance, underscoring the need to secure a reliable and stable supply.

Understanding the battery value chain is essential to appreciate the strategic importance of critical minerals in India’s EV transition. A battery manufacturing supply chain begins with the upstream segment that involves the exploration and mining of lithium, graphite, cobalt, and nickel. The midstream segment encompasses refining and processing of raw ore into battery-grade chemicals such as lithium hydroxide and lithium carbonate, followed by the production of cathode active material (CAM) and anode material, which serve as direct inputs for the downstream segment of battery cell manufacturing, battery pack assembly, and EV production. 

Table 1: Critical minerals used in EV manufacturing and associated supply risk

Source: Compiled by the author from International Energy Agency, Global Critical Minerals Outlook 2025 (IEA, 2025); US Geological Survey, Mineral Commodity Summaries 2025 (USGS, 2025); and World Bank Group, Minerals for Climate Action: The Mineral Intensity of the Clean Energy Transition (World Bank, 2023).

Despite efforts to expand domestic manufacturing, India remains heavily dependent on imports for most critical minerals essential for EV batteries. India is 100% import-dependent for primary raw materials such as lithium, nickel, and cobalt[iv]. This dependence is further compounded by the overwhelming concentration of global midstream processing capacity in China, accounting for 65 per cent of battery-grade lithium processing, 90 per cent of battery-grade graphite processing, and 91 per cent of rare earth processing, respectively.[v] In 2025, China's Ministry of Commerce and General Administration of Customs announced export licensing requirements for high-performance lithium-ion batteries, cathode materials, artificial-graphite anodes, and associated manufacturing technology, which could increase supply chain vulnerability for Indian EV manufacturers who rely on Chinese midstream processing.[vi]  

To address this vulnerability, the Government of India launched the Advanced Chemistry Cell (ACC) Production-Linked Incentive (PLI) scheme in 2021, aiming to establish 50 GWh of domestic battery cell manufacturing capacity. However, battery cell manufacturing continues to depend on processed battery-grade materials, for which India remains significantly reliant on imports from China. As of 2025, the scheme has commissioned only 1.4 GWh of capacity.[vii] The limited progress of the scheme can be partly attributed to the absence of adequate domestic refining and processing capacity as well as the lack of a reliable and cost-effective supply of battery-grade chemicals. In 2025, the government of India launched the National Critical Mineral Mission (NCMM). The mission aims to secure a long-term, sustainable supply of critical minerals and increase domestic critical mineral production across the value chain, including all the stages from mineral exploration and mining to beneficiation, processing, and recovery from end-of-life products. It also seeks to acquire critical mineral assets abroad.

Against this backdrop, India-Australia cooperation in critical minerals assumes immense significance in securing a resilient supply chain for accelerating India’s EV transition. The partnership is underpinned by the complementary strengths of the two countries; Australia possesses abundant critical mineral deposits, while India represents one of the world’s fastest-growing EV markets. Australia holds around 40–45 per cent of the global lithium reserves and is the world’s largest lithium producer. It is among the top five global producers of cobalt and rare earth elements, seeking to diversify its export markets.[viii] India requires a reliable supplier to cater to the rapid electrification of the transport sector in the country, with annual EV sales surging from 50,000 in 2016 to 2.08 million in 2024.[ix] Furthermore, both countries are contributing to the broader global effort to de-risk concentrated critical mineral supply chains.

Recent Developments in India-Australia Cooperation in Critical Minerals

India and Australia have emerged as close partners in the Indo-Pacific region, united by shared values of democracy, adherence to the rule of law, and a common commitment to a free, open, and rules-based order in the Indo-Pacific Ocean. The bilateral relationship between the two countries has evolved significantly over the past decade, expanding cooperation across a range of sectors such as trade, defence, clean energy, and critical minerals. In 2020, India and Australia elevated their bilateral relationship to a Comprehensive Strategic Partnership (CSP), marking a qualitative shift. Building on this momentum, critical minerals have emerged as one of the most promising areas of bilateral cooperation. Reflecting this growing collaboration, KABIL (Khanij Bidesh India Limited) and the CMO (Critical Minerals Office, formerly CMFO) of Australia signed an MOU, formalising the Critical Minerals Investment Partnership (CMIP). CMIP is an initiative aimed at conducting joint exploration, due diligence, co-investment, and acquisition of mineral assets. It reached a milestone by identifying five target projects in 2023, two in lithium and three in cobalt, for detailed due diligence and assessment of their commercial viability for mining[x]. CMIP further complements the National Critical Mineral Mission of India by investing in mineral assets abroad and ensuring mineral security.

Growing trade integration has complemented investment cooperation. In 2022, India and Australia signed the Australia-India Economic Cooperation and Trade Agreement (ECTA), which lays the foundation for a comprehensive Free Trade Agreement (FTA) to be concluded in the coming years. It aims to reduce tariffs and improve market access. The agreement provides tariff reductions on a range of critical minerals, metallic ores, and other products, including titanium ores, zirconium ores, cobalt ores, nickel ores, etc.[xi] These are essential components in renewable systems. It enhances Australia's market access to India, which is one of the world's fastest-growing economies, while supporting India's clean energy transition through secure resource supply. ECTA is primarily a trade agreement, but the trade incentive allows Indian investors to invest in Australian mines and import at a relatively lower cost, enabling a clean energy transition in India, thereby indirectly complementing CMIP.

Beyond investment and trade, India-Australia critical mineral cooperation has expanded to include research, technology development, and innovation. In 2024, both countries launched the India-Australia Critical Minerals Research Partnership (IACMRP), with a combined funding commitment of AUD 12.2 million.[xii] On the upstream side, the partnership seeks to strengthen India’s critical mineral exploration capabilities by leveraging Australia’s globally recognised expertise in geological surveying, mapping, exploration, and mining. The partnership also enables Australia to enhance its exploration technologies and tools by applying them to India's diverse geological settings, thereby supporting future critical mineral discoveries in Australia. Although the research partnership has not yet launched any dedicated project on lithium and graphite mining, it could contribute to future commercial development of the lithium-bearing pegmatite occurrence identified in Karnataka in 2020 and the inferred (G3) lithium resources identified in Jammu and Kashmir in 2023, which have yet to reach commercial production due to geological and economic uncertainty.[xiii] It could also support the development of substantial graphite resources identified in Arunachal Pradesh, which is underexplored due to limited geological surveying.[xiv]

The research partnership also extends to the midstream segment, where it seeks to strengthen mineral processing capabilities. The Novel Processes for Rare Earth Metal and Alloy Production Project under IACMRP focuses on improving the processing of rare earth minerals, which are used in the manufacturing of permanent magnets. These magnets are an essential component of EV motors. Another project, Sustainable Cathode Production, aims to develop sustainable CAM production capabilities. Nevertheless, the current research portfolio does not yet adequately address refining and processing technologies for the production of battery-grade lithium, nickel, and cobalt, which are essential for a resilient EV battery ecosystem.

An important component of the EV battery, after lithium, is arguably graphite. It is a primary anode material in lithium-ion batteries. It is also one of the largest mineral components in lithium-ion batteries by weight.[xv] However, the global graphite supply chain is highly concentrated, with China accounting for around 90–95 per cent of battery-grade graphite processing capacity.[xvi] In 2023, China’s Ministry of Commerce (MOFCOM) introduced export licensing regulations for selected graphite products on the grounds of national security and dual-use concerns, highlighting the geopolitical risks associated with supply chain concentration.

India possesses an estimated 301.5 Mt (million metric tonnes) of graphite resources, supported by 32 mining leases. However, only nine mines are currently operational, reflecting the limited commercial development of these reserves. Domestic graphite production remains constrained by the low grade and uncertainties surrounding the commercial viability of many deposits.[xvii] Moreover, investment in graphite mining has remained limited because India lacks large-scale battery-grade graphite processing. Similarly, Australia has 22 Mt of economically demonstrated graphite resources but has limited commercial-scale production, placing it at a relatively early stage of development.[xviii] Historically, mining investments in Australia have focused on established commodities such as lithium, gold, and iron ore, while EV-driven demand for graphite has gained momentum only in recent years.

In the midstream segment, the Commonwealth Scientific and Industrial Research Organisation (CSIRO), Australia's national science agency, is undertaking research and development to advance refining and processing technologies for battery-grade graphite production. Conventional battery-grade graphite production relies on hydrofluoric acid (HF), a highly toxic chemical with significant environmental implications. CSIRO is therefore developing cleaner, HF-free, and lower-emission graphite processing technologies to promote more sustainable graphite production. While these initiatives are largely domestic in scope, they also present significant opportunities for bilateral collaboration. Given that India possesses significant resources and Australia has developed advanced processing capabilities, existing bilateral frameworks, such as CMIP and IACMRP, could be expanded to include joint ventures, technology transfer, research collaboration, and knowledge sharing in graphite exploration, mining, processing, and supply chain development.

The strategic rationale for the India-Australia critical mineral partnership is not just about India’s manufacturing of EVs. Building a comprehensive EV ecosystem has wider implications for India's macroeconomic stability and external sector resilience. With nearly 85–88 per cent of its crude oil requirements met through imports, India remains highly vulnerable to energy shocks and fluctuations in oil prices.[xix] The import dependence contributes to substantial foreign exchange outflows, widens the current account deficit, exerts depreciation pressure on the Indian rupee, and fuels inflation.

In the 21st century, oil has become an important instrument of geoeconomic statecraft, influencing global power dynamics and strategic competition. Contemporary geopolitical instability, in the light of the Russia-Ukraine conflict and tensions in the broader West Asia region that led to the blockage of the Strait of Hormuz, has underscored the strategic risks associated with excessive dependence on imported fossil fuels. These developments have disrupted energy markets, reinforcing the need to shift to renewable alternatives. Against this backdrop, electrification of the transport sector represents a form of strategic hedging against future energy disruptions, protecting India from external energy shocks.

Conclusion

Critical minerals have emerged as one of the most promising areas of India-Australia cooperation, driven by the shared objective of diversifying global supply chains and enhancing mineral security. The robust bilateral ties provide a solid foundation for deepening cooperation across the critical mineral value chain. The existing frameworks, such as ECTA, CMIP, and IACMRP, have laid the foundation for trade, investment, and research in critical minerals. However, the existing partnership remains concentrated on a limited number of minerals and could be expanded to include a wider range of critical minerals, such as graphite, which is essential for the EV ecosystem. Expanding collaboration across exploration, processing, technology transfer, and supply chain development would not only enhance the resilience of critical mineral supply chains but also support both countries’ clean energy and industrial ambitions.

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*Preethi Prabhu, Research Intern, Indian Council of World Affairs, New Delhi
Disclaimer: Views expressed are personal. 

Endnotes

[i] Press Information Bureau, Government of India. “Cabinet Approves National Critical Mineral Mission.” July 2025. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2152240.

[ii] Press Information Bureau, Government of India. “Cabinet Approves Memorandum of Understanding between India and Australia on Cooperation in Critical Minerals.” October 13, 2021. https://www.pib.gov.in/PressReleasePage.aspx?PRID=1768712.

[iii] Press Information Bureau, Government of India. “Cabinet Approves Royalty Rates for Certain Critical and Strategic Minerals.” July 12, 2023. https://www.pib.gov.in/PressReleasePage.aspx?PRID=1942027.

[iv] Down To Earth. “India’s Critical Mineral Imports Remain Highly Concentrated, Exposing Supply Risks and Driving Diversification Push.” Accessed June 29, 2026. https://www.downtoearth.org.in/energy/indias-critical-mineral-imports-remain-highly-concentrated-exposing-supply-risks-and-driving-diversification-push.

[v] International Energy Agency, Critical Minerals Market Review 2023 (Paris: IEA, 2023), https://www.iea.org/reports/critical-minerals-market-review-2023.

[vi] International Energy Agency, Critical Minerals Market Review 2023 (Paris: IEA, 2023), https://www.iea.org/reports/critical-minerals-market-review-2023.

[vii] Press Information Bureau, Government of India, “Advanced Chemistry Cell (ACC) Batteries and Domestic Capacity,” December 12, 2025, https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=2202973.

[viii] Geoscience Australia, Critical Minerals, Australian Government, https://www.ga.gov.au/scientific-topics/minerals/critical-minerals; United States Geological Survey, Mineral Commodity Summaries 2024 (Reston, VA: USGS, 2024), https://www.usgs.gov/centers/national-minerals-information-center/mineral-commodity-summaries; International Energy Agency, Critical Minerals Market Review 2023 (Paris: IEA, 2023), https://www.iea.org/reports/critical-minerals-market-review-2023.

[ix] NITI Aayog, Unlocking a $200 Billion Opportunity: Electric Vehicles in India (New Delhi: NITI Aayog, August 2025), 6, https://pm-ebus-sewa.mohua.gov.in/wp-content/uploads/2025/08/Electric-Vehicles-WEB-LOW-Report.pdf.

[x] Madeleine King, Milestone in India and Australia Critical Minerals Investment Partnership, Australian Government, Department of Industry, Science and Resources, March 9, 2023, https://www.minister.industry.gov.au/ministers/king/media-releases/milestone-india-and-australia-critical-minerals-investment-partnership.

[xi] Department of Foreign Affairs and Trade, Australian Government, “Australia–India ECTA: Benefits for Australian Critical Minerals and Resources Sectors,” accessed June 29, 2026, https://www.dfat.gov.au/trade/agreements/in-force/australia-india-ecta/outcomes/australia-india-ecta-benefits-australian-critical-minerals-and-resources-sectors.

[xii] Commonwealth Scientific and Industrial Research Organisation (CSIRO), “India,” accessed June 29, 2026, https://www.csiro.au/en/work-with-us/international/india.

[xiii] Government of India, Geological Survey of India, “Lithium Deposits Found in Jammu and Kashmir,” Ministry of Mines Press Information Bureau, 2023, https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=1944302; Government of India, Atomic Minerals Directorate for Exploration and Research, cited in Ministry of Mines reply on lithium exploration in Karnataka (Marlagalla area, Mandya District), 2023, https://www.pib.gov.in/Pressreleaseshare.aspx?PRID=1942810.

[xiv] Northeast Now, “Arunachal Has 35% of India's Graphite Deposits: GSI,” accessed June 29, 2026, https://nenow.in/north-east-news/arunachal-has-35-pc-of-indias-graphite-deposit-gsi.html.

[xv] Natural Resources Canada, “Graphite Facts,” accessed June 29, 2026, https://natural-resources.canada.ca/minerals-mining/mining-data-statistics-analysis/minerals-metals-facts/graphite-facts.

[xvi]  International Energy Agency, Global Critical Minerals Outlook 2024 (Paris: IEA, 2024), https://www.iea.org/reports/global-critical-minerals-outlook-2024; International Energy Agency, Critical Minerals Market Review 2023 (Paris: IEA, 2023), https://www.iea.org/reports/critical-minerals-market-review-2023.

[xvii] Geological Survey of India, Indian Minerals Yearbook: Graphite (Ministry of Mines, Government of India, latest available edition), https://ibm.gov.in/index.php?c=pages&m=index&id=512; Ministry of Mines, Government of India, Critical Minerals and Graphite Overview, https://www.mines.gov.in.

[xviii] Geoscience Australia, Critical Minerals and Energy Resources, Australian Government, https://www.ga.gov.au/scientific-topics/minerals/critical-minerals; Geoscience Australia, Australia’s Identified Mineral Resources (AIMR), https://www.ga.gov.au/aimr

[xix] Petroleum Planning and Analysis Cell (PPAC), Ready Reckoner / Basic Statistics on Indian Petroleum & Natural Gas, Ministry of Petroleum and Natural Gas, Government of India, https://ppac.gov.in/content/147_1_ReadyReckoner.aspx.