A new report by CII and EY warns that India relies entirely on imports for 15 of the 23 minerals essential for its green energy transition. This dependency creates new supply chain risks for companies in the EV, battery, and renewable energy sectors, shifting energy security concerns from fossil fuels to critical minerals.
India’s transition toward clean energy is bringing to light a new strategic vulnerability: a heavy reliance on imported critical minerals. A joint report published by the Confederation of Indian Industry (CII) and EY highlights that India is currently 100% dependent on foreign sources for 15 out of 23 energy-transition minerals essential for modern technology.
As the country expands its infrastructure for renewable energy, battery storage, and electric mobility, the definition of energy security is evolving. Traditionally, India’s primary energy risk was the import of oil and gas. Now, the focus is shifting toward the availability and supply chain security of materials such as lithium, cobalt, nickel, and rare earth elements.
Geopolitical Supply Risks
The report points to a high concentration of global mineral refining and processing capacity in a few nations, most notably China. This creates a potential bottleneck for Indian manufacturers who depend on these materials for batteries, solar panels, and electronic components. For instance, global refining capacity for graphite is 93% concentrated in China, while rare-earth processing stands at 85%. Other critical minerals show similar trends, with cobalt at 79% and lithium at 70% refining capacity held by the same dominant market. This concentration exposes India to supply chain disruptions and price volatility, which could impact the margins of domestic companies operating in the clean energy space.
Rising Demand Through 2070
The demand for these minerals is expected to grow dramatically as India builds out its renewable energy grid and transitions its transportation sector. Projections indicate that between 2025 and 2070, India will require over 66 million tonnes of copper, 46 million tonnes of graphite, 19.5 million tonnes of silicon, and 11.5 million tonnes of nickel. Meeting this demand will require not just finding new sources, but also establishing robust domestic refining and processing capabilities.
Strategic Response and Monitoring
To mitigate these risks, the government has launched initiatives like the National Critical Minerals Mission and set up Khanij Bidesh India Ltd (KABIL) to acquire and secure mineral assets overseas. These bodies are tasked with diversifying India's supply chains and reducing dependence on single-source suppliers.
For investors, the evolution of this sector is a key factor to watch. The profitability and stability of companies in the EV, battery, and renewable energy sectors will increasingly depend on their ability to secure reliable raw material access. Market participants may monitor progress in domestic mineral exploration, the effectiveness of government-led overseas acquisitions, and the development of local recycling infrastructure, which could eventually reduce reliance on imports.