India Considers 6-Month Critical Mineral Reserve to Reduce Import Reliance

India is working on a proposal to build a reserve of critical minerals covering about 6 months of demand, according to a Mint report citing officials. The framework is being discussed by the ministries of mines and heavy industries. 

The stockpile is expected to include lithium, cobalt, nickel, copper, and rare earth elements. These are key inputs for sectors such as electric vehicles, renewable energy storage, and electronics, where import dependence remains significant. 

Trigger from Global Supply Risks 

This follows concerns over supply concentration and disruptions in global markets. China holds a large share of rare earth supply chains, with about 60% of mining output and nearly 90% of processing capacity. 

Supply risks became visible when China restricted exports of rare-earth magnets during trade tensions last year. This affected industries dependent on steady supplies, including automotive, electronics and clean energy segments. 

Demand Outlook Remains Strong 

Projections indicate a sharp increase in demand over the next few years. A Deloitte-Ficci report estimates copper demand could reach at least 3,000 kilotonnes by FY30, compared with 1,875 kt in FY25. 

Nickel demand is expected to rise between 212 kt and 276 kt from about 128 kt, while lithium demand may increase to 21-30 kt from 3.4 kt, driven by battery and storage requirements. 

Policy and Sourcing Support 

The proposed reserve is linked to the National Critical Minerals Mission, which has an outlay of ₹16,300 crore. The programme focuses on improving domestic mining, processing and recycling capacity.  

India has also been seeking overseas supplies through Khanij Bidesh India Ltd, which is involved in partnerships and acquisitions in countries including Argentina, Australia and Chile. 

Cost and Execution Challenges 

Setting up such reserves requires investment and long-term planning. The International Energy Agency has noted that prices of critical minerals have shown higher volatility than crude oil. 

Dependence on imports and limited domestic processing capacity may affect the pace of implementation. Building stable supply chains is expected to take time despite policy measures. 

Read More: Foreign Portfolio Outflows Top $20 Billion in 2026 Amid Oil Price Rises! 

Conclusion 

The proposed stockpile is intended to provide a buffer against supply disruptions. Progress will depend on procurement strategy and expansion of domestic capacity. 

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