India Eyes Global Critical Minerals Pacts Under FTAs

In a landmark move to secure the lifeblood of modern industrialisation, the Government of India has unveiled a comprehensive roadmap to strengthen its access to critical minerals—a group of essential raw materials required for electronics, clean energy technologies, EV batteries, defence equipment, and semiconductor production. With global competition intensifying, the recently notified National Critical Minerals Mission (NCMM) is setting the stage for strategic global partnerships, while simultaneously unlocking fresh growth opportunities for India’s MSMEs in mining, mineral processing, and associated manufacturing.

Critical Minerals in the FTA Framework

At the heart of this mission lies the government’s ambition to include dedicated critical minerals clauses in existing and new Free Trade Agreements (FTAs) and to establish Critical Minerals Partnership Agreements (CMPAs) with mineral-rich countries such as Australia, Chile, Peru, Argentina, and Canada. These countries together control significant global reserves of lithium, copper, cobalt, nickel, and rare earth elements.

India has already made headway—a trade pact with Australia is in place and being expanded, while negotiations with Canada, Chile, and Peru are underway. The Indian state-backed firm Khanij Bidesh India Ltd (KABIL) has also begun exploration collaborations with Australia and Argentina.

A Mission with Money and Momentum

The Mission, first outlined in the 2024 Union Budget and cleared by the Cabinet in January 2025, promises substantial financial muscle:

₹16,300 crore in government funding.

₹18,000 crore from state-run companies.

₹2,500 crore/year from Indian private sector investments abroad in exploration and acquisition of mineral assets.

₹4,000 crore subsidy for mining and evacuation of minerals abroad.

₹500 crore for creating domestic mineral processing parks.

₹1,500 crore scheme for mineral recycling.

₹500 crore for creating a National Critical Minerals Stockpile.

₹7,000 crore for domestic and overseas exploration activities through 2030-31.

MSMEs: The Underestimated Beneficiaries

While the focus of the Mission appears to be large-scale global collaboration, MSMEs are quietly poised to be significant stakeholders in this new mineral economy.

Mineral Processing Parks: A Gateway for MSME Integration

The establishment of dedicated mineral processing parks, with an allocation of ₹500 crore, presents a golden opportunity for MSMEs engaged in metallurgy, machinery manufacturing, and chemical processing to embed themselves into critical mineral value chains. With the government willing to utilise existing industrial parks, MSMEs operating within or around these facilities can leverage shared infrastructure to scale up quickly.

Incentives for Exploration Startups and Junior Miners

The Mission highlights fiscal measures such as tax credits and soft loans aimed at junior exploration companies—this is a segment where MSMEs can flourish. Many smaller Indian enterprises and startups already have geoscientific expertise or data analytics capabilities that can be leveraged in mineral mapping, survey technologies, and sustainable extraction techniques.

Entry into the Global Supply Chain

The emphasis on international partnerships opens the door for niche MSMEs to collaborate in technology transfer, supply of machinery, remote monitoring systems, and sustainable mining logistics. For MSMEs with innovative solutions, especially in clean-tech and circular economy processes, the government’s diplomatic and trade efforts may unlock previously inaccessible global markets.

Boost for the Recycling Industry

The allocation of ₹1,500 crore to encourage critical mineral recycling, coupled with plans to revise import duties on recyclable materials, is a direct incentive for MSMEs in e-waste, battery recycling, and scrap processing. These enterprises can become pivotal in closing the loop for minerals like lithium, cobalt, and rare earths, which are largely import-dependent.

Auction and Exploration Support

The Mission promises 1,200 exploration projects and the auctioning of over 100 critical mineral blocks by 2030. This can greatly expand contracting and subcontracting opportunities for MSMEs in drilling services, geophysical survey equipment, and logistics.

Risks and Readiness

However, tapping into these opportunities requires MSMEs to upscale their technical, financial, and regulatory preparedness. The global nature of these engagements demands adherence to international standards, environmental and social compliance, and efficient project execution.

Industry associations, government bodies, and financial institutions must design MSME-focused capacity-building programs to help them benefit from the Mission’s provisions. Encouraging public-private joint ventures, as the Mission suggests, could also offer a structured pathway for small players to team up with larger PSUs or private firms.

From Invisible to Indispensable

India’s push to secure critical mineral assets globally through FTAs and CMPAs is not just a foreign policy manoeuvre or an industrial policy imperative—it’s a tectonic shift in the country’s resource strategy. For India’s MSME sector, often overlooked in resource-intensive industries, this is a rare window to diversify beyond traditional segments into strategic minerals, clean-tech supply chains, and value-added processing.

With the right policy nudges and entrepreneurial resolve, Indian MSMEs can evolve from being invisible cogs to indispensable engines in India’s mineral self-reliance journey.

 Minerals Industry | Mines and Minerals