India Launches National Critical Mineral Mission with ₹16,300 Crore to Counter China's Rare Earth Mineral Curbs

India has taken decisive action to strengthen its critical mineral security by launching the National Critical Mineral Mission with substantial financial backing. This strategic initiative addresses growing concerns about supply chain vulnerabilities and aims to establish comprehensive domestic capabilities across the entire mineral value chain.

National Critical Mineral Mission Approved

The Union Cabinet approved the launch of the National Critical Mineral Mission on January 29, 2025, for a period of 7 years from 2024-25 to 2030-31, with a proposed expenditure of ₹16,300 crore and an expected investment of ₹18,000 crore by Public Sector Undertakings and other stakeholders. The NCMM aims to secure a long-term sustainable supply of critical minerals and strengthen India's critical mineral value chains encompassing all stages from mineral exploration and mining to beneficiation, processing, and recovery from end-of-life products.

To boost domestic production and reduce India's dependence on imported lithium, cobalt and other key materials required for EV batteries, the Government of India has taken significant steps through comprehensive policy reforms and increased exploration activities.

Legislative Reforms and Auction Framework

The Mines and Minerals Development & Regulation Act, 1957, has been amended through the MMDR Amendment Act, 202,3, with effect from August 17, 2023. Additionally, the Ministry of Mines has been empowered to auction blocks for the grant of an Exploration License through an order dated October 21, 2024, under Section 20A of the MMDR Act 1957.

The Central Government has successfully auctioned 24 blocks of critical and strategic minerals in 4 tranches in 2024. This auction mechanism ensures transparent allocation while encouraging private sector participation in the critical minerals sector.

Read More: India Explores Rare Earth Magnet Production with Public and Private Sectors!

Geological Survey Exploration Initiatives

The exploration of critical minerals has significantly increased over the past 3 years. The Geological Survey of India has undertaken 368 exploration projects focused on critical and strategic minerals. In the FY 2024-25, 195 projects are being executed, and 227 projects have been approved for the upcoming financial year.

This comprehensive exploration program represents one of the largest systematic efforts to map India's critical mineral resources and establish a robust foundation for future mining operations.

Foreign Direct Investment Policy Framework

100% FDI is allowed under the Automatic route for mining and exploration of metal and non-metal ores. A foreign company may incorporate an Indian subsidiary company or invest in an existing Indian Company to become eligible for the grant of mining and exploration rights.

This liberalised FDI policy enables international mining companies to participate directly in India's critical minerals sector without requiring prior government approval for investment decisions.

Customs Duty Rationalisation Measures

To support the critical minerals sector, the Government has eliminated customs duties on 25 minerals and reduced Basic Customs Duties on 2 minerals in the Union Budget for 2024-25. These measures are designed to reduce input costs for downstream industries while encouraging domestic processing and value-addedvalue addition activities.

Strategic Response to Global Supply Chain Challenges

The National Critical Mineral Mission represents India's strategic response to growing global tensions around critical mineral supply chains, particularly concerning China's dominant position in rare earth minerals processing and export controls. The mission ensures long-term energy security and supports India's transition to clean energy technologies, including electric vehicles and renewable energy systems.

Conclusion

India's National Critical Mineral Mission, with ₹16,300 crore expenditure over 7 years, demonstrates comprehensive strategic planning to counter China's rare earth mineral curbs. Combined with 24 successful mineral block auctions, 368 exploration projects, and liberalised FDI policies, this initiative positions India to achieve greater self-reliance in critical minerals essential for the country's clean energy transition and technological advancement.

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in securities are subject to market risks. Read all related documents carefully before investing.