India's Mineral Strategy: Beyond Mining Reforms

The Union Cabinet's revision of royalty rates for critical minerals may boost exploration but lacks strategic value without domestic processing capability. The Global Trade Research Initiative urges India to develop an integrated ecosystem for refining, highlighting that true self-reliance needs more than just mining reforms.

In a pivotal move, the Union Cabinet has revised royalty rates for key critical minerals, sparking optimism for enhanced exploration and competitive bidding in upcoming auctions. Still, the Global Trade Research Initiative (GTRI) warns that without bolstering domestic processing capabilities, India's strategic advantages remain elusive.

While the shift to a 1-4 percent ad-valorem royalty structure on minerals like graphite, zirconium, rubidium, and caesium is commendable and expected to reverse deterrents posed by the previous per-tonne regime, GTRI highlights India's deeper challenge in refining these materials for high-tech sectors. Current capabilities in upgrading graphite exist, yet high-grade graphite for battery use is predominantly imported.

For minerals such as zirconium, India barely scratches its potential due to limited processing capacity for electronics-grade materials. Rubidium and caesium face even tougher obstacles as exploration is nascent and processing facilities for their derivatives are nonexistent, leaving downstream industries reliant on imports, chiefly from China.

GTRI advocates that India's path to true self-reliance in cutting-edge technologies, including electric vehicles and semiconductors, hinges on aligning royalty reforms with robust domestic processing infrastructure, encouraging private investment, and building integrated value chains. The Cabinet's move is a progressive step, yet its success will be measured by swift implementation, inter-agency synergy, and substantial investments. (ANI)

(With inputs from agencies.)