India is planning to build a six-month strategic reserve of critical minerals to shield its green energy and manufacturing sectors from supply shocks and price swings, two people aware of the matter said. The Union ministries of mines and heavy industries are working on a plan to stockpile imported and locally sourced critical minerals such as lithium, cobalt, nickel, copper and rare earth elements, a segment dominated by China.
The strategic reserve will act as a long-term safeguard for sectors such as electric mobility, energy storage and electronics manufacturing, which are increasingly dependent on imports, the people cited above said on the condition of anonymity. Critical minerals go into batteries, renewable energy systems and advanced electronics, making them indispensable in the global energy transition.
“The plan for a six-month buffer is under consideration, and initial discussions with the industry have begun on its necessity and structure. It will require a mix of domestic sourcing and overseas procurement,” said one of the two people cited above, requesting anonymity.
“India’s consideration to build strategic critical mineral reserves comes from growing concerns over supply chain vulnerabilities and price volatility in global mineral markets,” said the second person, also on condition of anonymity.
Beijing bouncer
Just a year ago, Beijing halted exports of rare-earth magnets after a tariff tussle with the US, sending shockwaves across the globe. New Delhi launched a ₹7,280-crore incentive package to develop local rare earth processing capacity, even as the development exposed the vulnerability of India's renewable energy, electronics, defence, and automotive industries.
While China dominates the critical mineral supply chain and controls its supplies and price trend, several countries are stockpiling critical minerals. The US maintains them under its National Defense Stockpile, while China operates through its State Reserve Bureau. South Korea maintains reserves of key battery materials through state-backed agencies.
Queries emailed to the spokespersons of the ministries of mines, heavy industries, and external affairs on 28 April remained unanswered.
According to experts, India needs to ensure adequate supply of critical minerals in the global market, especially as China commands its mining and refining. In rare earths, China controls 60% of the world’s mining and 90% of the world’s processing capacity.
China's critical mineral prowess is defined by its dominance as a producer, refiner and consumer, said Harsh V Pant, vice-president at thinktank Observer Research Foundation, and a strategic expert. "Crucially, work on this sector began in China decades ago. In comparison, India is working on a smaller base, and a strategic reserve of these minerals would give India more control, and make India less dependent on external forces. Over the last few years, we have seen how supply chain disruptions have adversely impacted this sector," Pant said.
Politics of minerals
A strategic move to build such a buffer would require tens of billions of dollars globally, according to the International Energy Agency (IEA). The world’s premier energy monitoring organization said in its Global Critical Minerals Outlook 2025 that price volatility is a defining feature of critical mineral markets, with three-quarters of such minerals exhibiting greater price swings than oil.
Geopolitics is a key driver behind the move, noted Sankalp Gurjar, professor of geopolitics at Gokhale Institute of Politics and Economics. "India would not like to be subjected to pressure over the supply of critical minerals. In future, such strategic reserves would serve to guard against price volatility as well as supply crunch,” Gurjar said.
A February 2026 study by Deloitte and Ficci noted that a significant share of the country’s demand for critical minerals is met through imports, exposing domestic value chains to external shocks. At the same time, demand is set to rise sharply -- India’s copper consumption is projected to increase to at least 3,000 kilotonnes by FY30 from 1,875 kt in FY25, while nickel demand, which is currently fully import-dependent, is expected to grow to 212–276 kt from about 128 kt. Lithium demand, driven by electric vehicle batteries and energy storage, could rise nearly tenfold to 21–30 kt by FY30 from 3.4 kt in FY25, the report said.
A critical mineral recycler said that, since various downstream industries use these minerals, the impact of supply chain disruptions is severe.
Recycling
Pranati Kohli, lead, public affairs at Delhi-NCR based Lohum Cleantech, said a strategic reserve is the need of the hour. “As witnessed in the case of LPG and energy requirements during the ongoing conflict in West Asia, similar supply constraints can also come up in terms of critical minerals. And with diverse use cases of these minerals across several downstream players, the impact can be much more severe,” she said.
According to Kohli, these strategic reserves should be developed in public-private partnership mode. “If a state-run company develops and manages the reserves, adequate mechanisms should be in place for private players to tap those reserves in times of exigency.”
The move is in line with the government's plan to boost domestic mining and refining capacity, said Akhilesh Bagaria, co-founder of NavPrakriti, a Kolkata-headquartered critical mineral refining and battery recycling company. "US, China and South Korea have already announced plans for such reserves, so India too should move in this direction. Further the methodology and process for use of minerals from the reserves in times of exigencies by all stakeholders including private players would require comprehensive stakeholder consultations," Bagaria said.
India, on its part, has taken steps to strengthen its position in global mineral supply chains. The government has launched the National Critical Minerals Mission with an outlay of ₹16,300 crore, aimed at securing access to key resources and building domestic capabilities across the value chain, including stockpiling.
Sourcing woes
However, challenges remain.
“While the intent to build a strategic reserve of critical minerals is welcome, challenges still remain in sourcing these resources, as extraction from Indian mines as well as overseas mines will take a few more years to stabilize,” said a battery industry executive, requesting anonymity.
A 2023 US government report showed that as of March 2023, the National Defense Stockpile, which is maintained at six locations, contained $1.3 billion in total assets, including $912.3 million of stockpiled material. South Korea’s plan is for a buffer stockpile targeting a 100-day stockpile from the current 54-day levels, a February 2026 analysis by the Korean Institute for International Economic Policy, a think tank, showed.
Prices of critical minerals have been particularly turbulent in recent years. Lithium prices, for instance, fell by about 80% between 2023 and 2024 after a sharp run-up, according to the IEA, highlighting the boom-bust cycles that can disrupt downstream industries.
Apart from regulatory changes to the Mines and Minerals (Development and Regulation) Act to increase private sector participation and streamline the allocation of critical mineral blocks; state run Khanij Bidesh India Ltd. (KABIL) has also been active in acquiring overseas assets, including lithium blocks in Argentina, and forging partnerships in resource-rich countries such as Australia and Chile.