<p>The concentration of critical minerals supply chains in a few countries has emerged as a strategic vulnerability for the world. To combat China’s use of economic coercion, several bilateral and plurilateral partnerships are being explored.</p>.<p>It is in this light that the Joint India-European Union Comprehensive Strategic Agenda, released following the conclusion of the free trade agreement (FTA) negotiations, assumes significance. While acknowledging the current constraints, the agreement calls for cooperation aimed at “developing resilient, secure, and diversified critical minerals supply chains” as a key focus area. To operationalise this effectively, India and the EU can collaborate in mutually beneficial target areas.</p>.<p>Both parties struggle in the upstream segment of the critical minerals value chain, with a long gestation period between discovery and first production in mining projects. Regulatory hurdles, delays in obtaining clearances, environmental protests, and public backlash delay projects. Lately, India and the EU have been attempting to streamline domestic processes to incentivise private sector activity in the sector via the Mines and Minerals Development and Regulation Amendment Act, 2023, and the Critical Raw Materials Act, 2024, respectively. This shortcoming is reflected in the current scope of the India-EU partnership on critical minerals. Exploration, mapping, and investments in Indian mines do not feature.</p>.<p>Both parties, however, have signed MoUs with several mineral-rich nations individually, with some overlap as with Congo, Argentina, Chile, and Namibia. There is ~70% overlap between the critical minerals lists of both India and the EU, reflecting a convergence in priorities. India and the EU can coordinate to streamline mineral-specific agreements as well as foreign mine acquisitions, exploration, and procurement efforts. Combating China’s subsidy-linked suppression of commodity prices would require long-term procurement guarantees that would help ensure a stable supply for the EU’s processing plants and India’s great demand.</p>.<p>China’s dominance is primarily owing to processing-stage capabilities. It has been a net importer of rare earths since 2018 and focuses instead on value-added manufacturing domestically. While the current scope of the India-EU partnership hinges on battery manufacturing and downstream processing, the engagement is still relatively nascent, with no project-level outcomes as yet. Bilateral collaboration in this part of the mineral value chain should be doubled down.</p>.<p>The EU has technical competence in processing, and several projects are currently under construction. Initiatives such as the European Battery Alliance, a public-private model, seek to build an integrated domestic battery value chain in Europe. The IREL, while still at an early stage, has been exploring partnerships for rare earth magnet production with South Korea and Japan. Recent reports suggest that India is looking to incentivise companies to set up nickel and lithium processing plants. The India-EU partnership can complement these efforts.</p>.<p>Furthermore, recycling offers a pathway to bypass China’s processing capacity by prioritising e-waste stockpiles over mining. Europe has a strong focus on recycling and the circular economy, as indicated by the European Green Deal and the Circular Economy Action Plan. India has the potential to be a recycling hub despite being a late entrant, and it must collaborate with the EU on this.</p>.<p>Keeping pace with China</p>.<p>India and the EU are part of the Mineral Security Partnership; they must leverage their presence in plurilateral platforms to champion shared interests in long-term research towards rare earth substitutes and processing technology innovations, as well as blended finance and price-risk mechanisms.</p>.<p>Additionally, both parties have ambitious climate goals that include net-zero targets and the rapid expansion of renewable energy. As economies both concerned and overwhelmed by China’s subsidy-linked overcapacity and domineering capabilities in solar panels, batteries, and electric vehicles, India and the EU have also been individually trying to advance their interests by adopting a pragmatic and transactional approach to China. The EU is considering mandating technology transfers and know-how from Chinese companies looking to invest and expand within its jurisdiction. India, too, is cautiously opening up to Chinese investments, including in government contracts.</p>.<p>India and the EU already work together in areas such as clean energy and water management. The India-EU Trade and Technology Council (TTC), established in 2022, must be expanded in scope and ambition to include critical minerals as an area of focus. One way to do this is by instituting a separate task force reporting to the TTC’s working groups on clean energy and trade. As mentioned in the joint agenda, the partnership would also need to go beyond government participation and enable cross-border private sector engagement.</p>.<p><em>(The writer is a researcher in technology geopolitics at the Takshashila Institution)</em></p>
<p>The concentration of critical minerals supply chains in a few countries has emerged as a strategic vulnerability for the world. To combat China’s use of economic coercion, several bilateral and plurilateral partnerships are being explored.</p>.<p>It is in this light that the Joint India-European Union Comprehensive Strategic Agenda, released following the conclusion of the free trade agreement (FTA) negotiations, assumes significance. While acknowledging the current constraints, the agreement calls for cooperation aimed at “developing resilient, secure, and diversified critical minerals supply chains” as a key focus area. To operationalise this effectively, India and the EU can collaborate in mutually beneficial target areas.</p>.<p>Both parties struggle in the upstream segment of the critical minerals value chain, with a long gestation period between discovery and first production in mining projects. Regulatory hurdles, delays in obtaining clearances, environmental protests, and public backlash delay projects. Lately, India and the EU have been attempting to streamline domestic processes to incentivise private sector activity in the sector via the Mines and Minerals Development and Regulation Amendment Act, 2023, and the Critical Raw Materials Act, 2024, respectively. This shortcoming is reflected in the current scope of the India-EU partnership on critical minerals. Exploration, mapping, and investments in Indian mines do not feature.</p>.<p>Both parties, however, have signed MoUs with several mineral-rich nations individually, with some overlap as with Congo, Argentina, Chile, and Namibia. There is ~70% overlap between the critical minerals lists of both India and the EU, reflecting a convergence in priorities. India and the EU can coordinate to streamline mineral-specific agreements as well as foreign mine acquisitions, exploration, and procurement efforts. Combating China’s subsidy-linked suppression of commodity prices would require long-term procurement guarantees that would help ensure a stable supply for the EU’s processing plants and India’s great demand.</p>.<p>China’s dominance is primarily owing to processing-stage capabilities. It has been a net importer of rare earths since 2018 and focuses instead on value-added manufacturing domestically. While the current scope of the India-EU partnership hinges on battery manufacturing and downstream processing, the engagement is still relatively nascent, with no project-level outcomes as yet. Bilateral collaboration in this part of the mineral value chain should be doubled down.</p>.<p>The EU has technical competence in processing, and several projects are currently under construction. Initiatives such as the European Battery Alliance, a public-private model, seek to build an integrated domestic battery value chain in Europe. The IREL, while still at an early stage, has been exploring partnerships for rare earth magnet production with South Korea and Japan. Recent reports suggest that India is looking to incentivise companies to set up nickel and lithium processing plants. The India-EU partnership can complement these efforts.</p>.<p>Furthermore, recycling offers a pathway to bypass China’s processing capacity by prioritising e-waste stockpiles over mining. Europe has a strong focus on recycling and the circular economy, as indicated by the European Green Deal and the Circular Economy Action Plan. India has the potential to be a recycling hub despite being a late entrant, and it must collaborate with the EU on this.</p>.<p>Keeping pace with China</p>.<p>India and the EU are part of the Mineral Security Partnership; they must leverage their presence in plurilateral platforms to champion shared interests in long-term research towards rare earth substitutes and processing technology innovations, as well as blended finance and price-risk mechanisms.</p>.<p>Additionally, both parties have ambitious climate goals that include net-zero targets and the rapid expansion of renewable energy. As economies both concerned and overwhelmed by China’s subsidy-linked overcapacity and domineering capabilities in solar panels, batteries, and electric vehicles, India and the EU have also been individually trying to advance their interests by adopting a pragmatic and transactional approach to China. The EU is considering mandating technology transfers and know-how from Chinese companies looking to invest and expand within its jurisdiction. India, too, is cautiously opening up to Chinese investments, including in government contracts.</p>.<p>India and the EU already work together in areas such as clean energy and water management. The India-EU Trade and Technology Council (TTC), established in 2022, must be expanded in scope and ambition to include critical minerals as an area of focus. One way to do this is by instituting a separate task force reporting to the TTC’s working groups on clean energy and trade. As mentioned in the joint agenda, the partnership would also need to go beyond government participation and enable cross-border private sector engagement.</p>.<p><em>(The writer is a researcher in technology geopolitics at the Takshashila Institution)</em></p>
