India–Australia engagement on critical minerals is evolving and expanding
Recent bilateral and multilateral initiatives show a clear acceleration in India–Australia critical minerals engagement. This growth has been characterised by government memorandums of understanding, tariff-reducing trade agreements, joint research hubs and cross-border industry investments.
Both governments have explicitly recognised the strategic importance of critical minerals, committing resources through mechanisms such as the Australia–India Critical Minerals Investment Partnership and involvement in the United States-led Mineral Security Partnership. Looking ahead, the trajectory points to deeper collaboration that extends beyond project-level deals to encompass integrated, long-term frameworks spanning mining, processing and product delivery.
Recent bilateral and multilateral initiatives
In 2022 and 2023, India and Australia achieved major breakthroughs in their critical minerals engagement. The two governments signed a memorandum of understanding between India’s state-run minerals company Khanij Bidesh India Limited and Australia’s Critical Minerals Office in 2022, establishing the Australia–India Critical Minerals Investment Partnership. Under this partnership, by March 2023 the countries had identified five priority projects (two lithium and three cobalt) for joint due diligence and potential investment.
Another enabler of trade is the Australia–India Economic Cooperation and Trade Agreement, which entered into force in late 2022. This pact removed tariffs on key Australian mineral exports, such as lithium, cobalt, titanium, nickel, zirconium and rare-earth compounds, making it cheaper and easier for India to import these resources.
Through its participation in the Mineral Security Partnership, India works with partner countries to secure diversified and resilient access to critical minerals essential for clean energy technologies, electric mobility and industrial growth, while reducing dependence on China. In July, India, along with Quad partners (Australia, Japan and the US), pledged to reduce reliance on China to avoid economic coercion, price manipulation and supply chain disruptions.
Australia–India critical minerals collaboration extends beyond government partnerships to include strategic industry and academic collaboration. In late 2023, the India Institute of Technology Hyderabad and Monash University launched the Australia–India Critical Minerals Research Hub to drive innovation in sustainable mining and processing. In March, Khanij Bidesh India Limited and three other Indian firms sought a 20 percent stake (worth $600 million) in Chilean chemical company SQM’s Mount Holland and Andover lithium projects in Western Australia.
India’s strategy in transition
India itself has significant critical mineral reserves, notably in rare-earth elements, but has historically underused them. India holds about 8 percent of the world’s rare earth reserves. Yet it relies heavily on imports to meet current demand due to insufficient domestic processing capacity, technological constraints, infrastructure gaps and regulatory bottlenecks. The gap between potential and production is driving major policy shifts.
In January, the Indian government launched a National Critical Minerals Mission with a budget of 343 million Indian rupees (about $6 million) for seven years. The main parts of the mission include increasing domestic exploration and production; acquiring mineral assets abroad; promoting recycling and circular economy; and strengthening value chains through improved technology, skill development, and supportive regulation. India seeks to drive up domestic production by opening 1,200 sites for exploration, auctioning more than 100 new blocks and allowing private and foreign investment in critical minerals. The government is also incentivising urban mining and recycling as a parallel strategy.
Despite these efforts, India recognises it cannot meet all its needs domestically, at least not soon. Thus, a twin-track approach has emerged: developing domestic sources where feasible and securing reliable external supplies elsewhere. That has led India to pursue critical-minerals cooperation not only with Australia but around the world. For example, an India–Argentina memorandum of understanding was signed with Argentina’s Catamarca province in February. This agreement will facilitate lithium exploration, mining and investment opportunities for India’s public and private players. India’s state entities are also pursuing mineral access in other nations, including scouting lithium in Chile and cobalt in Democratic Republic of Congo. In September, battery materials company Altmin secured India’s first lithium refinery project listed under the Mineral Security Partnership, aiming to supply lithium outside of China’s dominance.
Opportunity and risk
Australia is no longer content to export only ore. The Critical Minerals Strategy 2023-2030 prioritises onshore processing: policy levers now include a 10 percent production tax incentive for refining minerals from a list of 31 critical minerals, and a $4 billion critical minerals facility to fill financing gaps. Both are designed to underwrite value added at home and make Australian trade dependable for partners such as India. Australia has also built partnerships with countries such as Britain and Canada to attract foreign investment and strengthen sustainable critical-minerals supply chains driven by environmental, social and governance considerations.
India’s critical-minerals initiatives, while ambitious, remain fragmented. They range from domestic reforms and recycling schemes to scattered overseas ventures, but aren’t part of a fully cohesive national strategy. This is clear in Australia–India joint initiatives, where cooperation has advanced through project-specific deals rather than a truly integrated, long-term framework.
This mismatch adds to a key vulnerability: despite strong political attention, both sides’ supply chains remain exposed to shocks. Analysts have observed that although critical-minerals cooperation features prominently in both countries’ economic, security and foreign policy discussions, their supply chains remain vulnerable to shocks arising from trade barriers, geopolitical tensions and great-power rivalries.
India’s private sector has begun stepping in to fill gaps and complement government-to-government efforts. Some of India’s biggest firms have positioned themselves as key players in the critical-minerals sector. In May, for example, mining company Vedanta announced plans to invest 800 million Indian rupees (about $14 million) as part of an investment plan that explicitly included critical minerals exploration in Northeast India.
However, this opportunity will require more deliberate structuring of India-Australia collaboration. To fully harness private sector strengths, the India-Australia partnership will need to incentivise joint ventures and technology transfers. One approach is to offer patient capital and risk-sharing, akin to how Japan’s Organization for Metals and Energy Security supported Australia’s Lynas Rare Earths despite long lead times and price volatility. Patient capital is long-term investment that tolerates delayed returns to advance strategic goals, helping de-risk critical projects that are essential for supply-chain resilience but slow to yield profit. A similar model could see Australian or Indian financial institutions providing concessional long-term loans, equity stakes, or production purchase guarantees to Australia–India mining ventures.
Trajectory ahead
India-Australia critical minerals cooperation is clearly on upward trajectory, but realising its full potential will require sustained high-level commitment and innovation. The project-level engagement must evolve into a long-term strategic framework covering the entire value chain. In practical terms, that could mean improved integration from Australian mines to Indian processors and manufacturers, involving aligning policies, supporting infrastructure and harmonising regulations.
To further support private sector engagement, India and Australia could explore establishing a critical minerals investment fund jointly, as recommended by analysts. The fund could take minority stakes in strategic projects, providing patient capital and confidence to other investors.
On the multilateral front, the two countries should continue to leverage platforms such as the Quad Critical Minerals Initiative, the G20, and the Mineral Security Partnership to set global standards and norms for critical minerals. Australia and India’s joint emphasis on environmental, social and governance standards can become a selling point internationally. This is particularly important when competing with China’s well-entrenched supply chains. Making a better offer in terms of ethics and reliability will attract global manufacturers to diversify through Indian–Australian sources.
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