Can India and Australia Build a China-Resilient Supply Chain?
Kolkata: The global energy transition is no longer only about expanding renewable electricity and electric mobility. It is increasingly becoming a contest over the critical minerals, processing technologies and industrial supply chains that make clean-energy systems possible. Lithium, cobalt, nickel, graphite and rare earth elements are essential for batteries, wind turbines, electronics, electric vehicles, defence platforms and advanced technologies. As strategic competition between the United States and China intensifies, these minerals are acquiring an importance comparable to that of oil during the twentieth century.
Countries are competing not only for access to mineral resources but also for control over the refining, processing and manufacturing capabilities that underpin technological and geopolitical power. For India, this shift presents both a strategic vulnerability and an economic opportunity. New Delhi has set a target of achieving 500 gigawatts of non-fossil-fuel electricity capacity by 2030 and net-zero emissions by 2070. However, the country’s clean-energy ambitions remain heavily exposed to mineral-processing and manufacturing supply chains in which China holds a dominant position.
Australia, with its substantial mineral resources, established mining sector and strategic alignment with India, has emerged as a natural partner. The critical question, however, is whether this collaboration can genuinely reduce India’s exposure to China or merely create another resource-supply relationship without building long-term industrial resilience.
Critical Minerals: The Building Blocks of Twenty-First-Century Power
Demand for critical minerals is expected to grow substantially as countries expand electric mobility, battery storage, renewable energy and electricity networks. The International Energy Agency’s Global Critical Minerals Outlook 2026 projects that demand for critical minerals will almost double by 2040 under its Stated Policies Scenario. Lithium is expected to experience the strongest growth, rising more than threefold, while demand for nickel, graphite and rare earth elements is also projected to increase significantly. The strategic challenge is not limited to extracting minerals from the ground. It lies in converting mineral ores into usable industrial inputs.
China occupies a powerful position in the midstream segments of several critical-mineral supply chains. Decades of state-supported industrial development, overseas investment, technological advancement and manufacturing expansion have enabled Beijing to build extensive capabilities in refining, chemical processing, battery materials and component manufacturing. Consequently, minerals extracted in countries such as Australia may still pass through Chinese processing facilities before reaching manufacturers elsewhere.
The concentration of processing capacity has also allowed critical minerals to become instruments of geopolitical leverage. Export restrictions involving minerals such as gallium, germanium and graphite have demonstrated how supply-chain dominance can influence strategic and economic competition.
Why Australia Matters to India
Australia possesses substantial resources of lithium, nickel, cobalt, graphite and rare earth elements. It also has a comparatively stable and transparent regulatory environment that is attractive to international investors. According to the latest Geoscience Australia rankings, Australia was the world’s largest producer of lithium and the third-largest producer of rare earths in 2024. It also ranked among the leading global holders of economic resources across several critical-mineral categories.
India’s interest in Australia extends beyond access to raw materials. Both countries are members of the Quad and share concerns about supply-chain resilience, maritime security, technological cooperation and economic diversification in the Indo-Pacific. Their strategic partnership already encompasses mining, clean energy, research, education, technology and investment.
The India–Australia Critical Minerals Investment Partnership has identified two lithium and three cobalt projects for detailed due diligence. The partnership seeks to encourage prospective Indian investment and build reliable supply chains between the two countries. India’s state-owned Khanij Bidesh India Limited, or KABIL, has participated in this due-diligence process as it explores potential investment opportunities in Australian lithium and cobalt projects. Australia therefore offers India something that few countries can provide: a politically stable and strategically trusted source of critical minerals outside China’s immediate sphere of influence. However, importing Australian minerals alone would not fundamentally transform India’s geopolitical position.
Dr. Anugrah Tripathi, Senior Technical Officer at the Indian Council of Forest Research and Education, stressed the importance of combining international partnerships with domestic industrial development. “Strategic alliances and domestic refining investments can counter China’s dominance,” he said.
The original comment also described Australia as the fourth-largest reserve holder of rare earth elements. Since official rankings distinguish between resources, reserves and production—and Australia’s position changes by year—the publication has retained only the analytically relevant and independently supportable portion of the observation.
The Real Bottleneck: Processing and Manufacturing
The major strategic bottleneck lies not merely below ground but in refining, processing and downstream manufacturing. Mining represents only the first stage of the critical-minerals value chain. Refining, chemical processing, component manufacturing, battery production and technological innovation generate much of the economic value and strategic influence.
India currently has limited domestic capacity in several of these downstream sectors. Without sustained investment in refining facilities, advanced metallurgy, battery-grade chemicals, material recovery and recycling infrastructure, India risks replacing one form of import dependence with another. Even where minerals are mined in Australia, some material may still be processed elsewhere before reaching Indian manufacturers. Such an arrangement would diversify the geographical origin of the ore without necessarily reducing dependence on concentrated processing systems.
Strategic autonomy, therefore, cannot be achieved merely by diversifying imports. It requires the creation of domestic industrial and technological capabilities.
Beyond Resource Diplomacy
India’s policy framework has increasingly begun to reflect this reality. The National Critical Mineral Mission seeks to strengthen domestic exploration, mining, beneficiation, processing and recycling while encouraging overseas acquisition and international partnerships. India has also identified minerals considered essential to economic development, national security and emerging technologies. Domestic mineral blocks are being auctioned, and geological exploration is expanding across several states. Nevertheless, India’s resources remain limited relative to the scale and diversity of Australia’s mineral base.
The future of the partnership will therefore depend on linking access to Australian resources with Indian industrial development. Australia, too, recognises that exporting unprocessed minerals captures only a fraction of their potential economic value. Its Critical Minerals Strategy 2023–2030 emphasises downstream processing, international partnerships, investment and integration into diversified global supply chains.
This creates an opportunity for India and Australia to move beyond a traditional buyer–seller relationship. Joint research in battery chemistry, collaborative refining facilities, workforce development, technology transfer, long-term purchasing arrangements and co-investment in manufacturing could build more resilient supply chains than mining agreements alone.
Strategic Competition Is Intensifying
Critical minerals are increasingly shaping geopolitical competition across the Indo-Pacific and beyond. The United States has introduced financial and industrial incentives to encourage supply chains involving trusted partners. Japan has expanded investments in overseas mineral projects, while the European Union has developed a regulatory framework intended to reduce excessive dependence on external suppliers.
Australia has similarly placed critical minerals at the centre of its economic and national-security strategy. India’s response must therefore be understood as strategic policy rather than merely mining or industrial policy. Countries that dominate mineral processing, battery technology, advanced manufacturing and recycling will exercise disproportionate influence over the emerging clean-energy economy.
The geopolitical question is no longer simply who possesses the minerals. It is who controls the technological ecosystems that transform those minerals into strategically valuable products.
Building Genuine Strategic Autonomy
India’s long-term competitiveness will depend less on access to individual mines and more on its ability to develop domestic capabilities. Refining and chemical-processing facilities must become a major national investment priority. India must also strengthen research ecosystems that connect universities, industry, start-ups and government institutions to develop next-generation battery technologies and alternative material chemistries.
Recycling should form a central component of mineral security. Urban mining, battery recovery and material reuse can reduce future dependence on imported raw materials while supporting circular supply chains. Financial instruments must also encourage Indian companies to enter capital-intensive and technologically demanding critical-minerals sectors.
Dr. Sudarsan J. S., Head of the School of Energy and Environment at NICMAR University, Pune, emphasised the need for an integrated approach. “Critical mineral security is not just about securing mines; it is about building a circular and sustainable value chain from extraction to recycling.” His observation highlights why India–Australia collaboration must extend beyond mineral deposits to include processing, material recovery, sustainable extraction and downstream manufacturing.
Regulatory certainty will also be essential for attracting long-term investment. Faster approval mechanisms may help projects advance, but environmental safeguards should not be weakened in the process. Mining and processing can produce significant ecological and social consequences, including water stress, waste generation, habitat loss and community displacement. Building resilient supply chains must therefore involve credible environmental, social and governance standards. Strategic autonomy will require coordinated industrial policy, not a collection of disconnected mining arrangements.
The India–Australia Industrial Opportunity
The strategic potential of the India–Australia relationship extends far beyond bilateral trade. Co-investment, joint processing, technology sharing and research collaboration could help create an alternative critical-minerals architecture for the Indo-Pacific.
Prof. Ajit Seshadri, Head–Environment at The Vigyan Vijay Foundation in New Delhi, said: “India–Australia cooperation need not be restricted to importing critical-mineral raw materials.” India could use Australian mineral inputs for domestic manufacturing and potentially export finished renewable-energy products, components and technologies to international markets. This would transform the partnership from a conventional resource arrangement into a two-way industrial relationship.
Australia would gain access to India’s manufacturing capabilities, expanding the market and technical workforce. India would obtain more reliable mineral supplies while developing domestic capacity in refining, battery materials, components and recycling. However, should the relationship remain limited to exporting raw resources, China is likely to retain its dominance over the most valuable segments of the supply chain.
The history of global energy transitions offers a clear lesson: resources matter, but capabilities matter more.
Resources Matter, but Capabilities Matter More
Countries that refine, manufacture, innovate and recycle will shape the future global economy. For India, critical minerals are not merely inputs for clean-energy technologies. They are strategic assets that will influence technological sovereignty, industrial competitiveness, national security and geopolitical power for decades. India and Australia have an opportunity to move beyond transactional cooperation and jointly build trusted, diversified and resilient supply chains.
Their success will not be determined solely by how many minerals they extract or trade. It will depend on the quality of the institutions, technologies, financing systems, environmental safeguards and industrial ecosystems they build together. The new currency of Indo-Pacific strategy is no longer measured only in barrels of oil or cubic metres of gas. It is increasingly defined by battery metals, processing capacity, manufacturing capability and technological control.
About the Author
Anusreeta Dutta is a researcher, policy analyst and columnist specialising in geopolitics, foreign policy, defence and strategic affairs, climate governance, energy transition and public policy. Her work has appeared in OPEN, Outlook India, Down To Earth, Policy Circle, Firstpost, Hindustan Times, CNN-News18 and other national and international publications.
