Critical Minerals and semiconductors are the two unseen but most powerful drivers of the modern global economy. From the smartphone in your pocket to the electric vehicle (EV) on the road to the defence systems protecting nations, these two resources form the backbone of 21st-century technology.
As India rapidly rises as one of the world’s biggest consumer and technology markets, achieving self-reliance in semiconductors and critical minerals has become a national priority. With ambitious programs like the India Semiconductor Mission (ISM) and the government’s five-pillar framework for essential minerals, the vision of Atmanirbhar Bharat is clearly taking shape.
As India rapidly rises as one of the world’s biggest consumer and technology markets, achieving self-reliance in semiconductors and critical minerals has become a national priority. With ambitious programs like the India Semiconductor Mission (ISM) and the government’s five-pillar framework for essential minerals, the vision of Atmanirbhar Bharat is clearly taking shape.
This article explores the importance of critical minerals and semiconductors in India’s economic journey, government policies, challenges, and how this push could redefine India’s position in the global supply chain.
Why Critical Minerals and Semiconductors Are Vital for India
The foundation of the economy of the future, critical minerals are more than simply common metals. Rare earth elements (REEs), lithium, cobalt, nickel, and graphite are among the minerals that are necessary for:
- Electric Vehicles (EVs): Lithium-ion batteries power next-gen mobility.
- Renewable Energy: Rare earth magnets and silicon are essential for wind turbines and solar panels.
- Defence Sector: REEs are used in modern electronics, missiles, and jet engines.
- Digital Economy: Critical minerals fuel 5G networks, smartphones, and high-performance computers.
India now relies mostly on imports, obtaining a large portion of its lithium from Latin America and Australia, while China is the leader in rare earth processing. This poses a strategic risk, particularly as demand for renewable energy and EVs rises.
The demand for lithium alone in India is predicted to triple by 2030, according to NITI Aayog. India runs the risk of becoming too reliant on foreign companies in the absence of a domestic supply, which would expose its aspirations in renewable energy and technology to supply interruptions.
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India’s Policy Initiative for Vital Minerals
A five-pillar framework for essential minerals self-reliance has been developed by the Indian government in recognition of this difficulty. These pillars consist of:
- Exploration and Mapping: Locating deposits in India, especially in areas like Rajasthan, Jharkhand, and Karnataka.
- Mining and Refining: Creating the capacity to process and refine important minerals in the country in addition to extracting them.
- Research and development: Putting money into creative solutions to enhance recycling and find alternatives to rare materials.
- Public-Private Partnerships: Encouraging Indian businesses to collaborate with multinational mining conglomerates.
To ensure long-term supply, international collaborations are formed with resource-rich countries such as Australia, Chile, and African states.
The Role of Semiconductors in Digital India
The brain of the future economy is semiconductors, if vital minerals are its “fuel.” Industrial robots, computers, EVs, defence gear, medical equipment, AI systems, and cell phones are all powered by semiconductors, sometimes known as chips.
The problem is that, now, Taiwan, China, and South Korea supply more than 90% of India’s semiconductor needs. A wake-up call, the worldwide chip scarcity during the epidemic affected everything from consumer gadgets to autos.
A nation that wants to become a global innovation powerhouse and a $5 trillion economy cannot continue to rely so much on foreign chipmakers.
India Semiconductor Mission (ISM): Building Chip Independence
To address this, the government started the India Semiconductor Mission (ISM), a comprehensive initiative to create a semiconductor ecosystem from start to finish. Here are a few noteworthy highlights:
- A ₹76,000 crore incentive plan aimed at luring in international semiconductor and display producers.
- Four new semiconductor projects with an approximate value of ₹4,600 crore that concentrate on design and manufacture have received cabinet clearance.
- Alliances to provide cutting-edge semiconductor manufacturing technology to India with international firms, including TSMC, Vedanta-Foxconn, and Micron.
- development of businesses focused on semiconductor design to promote domestic creativity.
- Beyond manufacturing, ISM also prioritises skill development with the goal of producing a workforce with advanced training in semiconductor fabrication and engineering.
Strategic Advantages of Critical Minerals and Semiconductor Self-Reliance
- Growth in the Economy and Employment
It’s anticipated that the semiconductor and critical minerals industries would directly and indirectly create lakhs of new jobs. Foreign direct investment (FDI) will also be drawn to a strong supply chain.
2. Cutting Down on Import Charges
India’s trade imbalance is mostly caused by its purchases of electronics. India may save billions of dollars a year by making chips and obtaining minerals locally.
3. National security
Advanced surveillance systems and national security defense equipment cannot rely on chips from other countries, particularly those in geopolitically sensitive areas. India’s security is strengthened by its domestic capabilities.
4. Encouragement of EVs and Renewables
Self-sufficiency guarantees that India’s clean energy transformation remains on course, from lithium-ion batteries to silicon for solar panels.
5. Emerging as a Global China Substitute
India is in a great position to establish itself as a reliable global center for semiconductors and minerals as the world seeks to diversify away from China.
Issues India Needs to Address
Despite the lofty objective, there are challenges along the way:
- Technology Gap: India is still lagging in the technologies needed for advanced semiconductor factories.
- High Capital Costs: The construction of a semiconductor factory might cost up to $10 billion.
- Professional Staff: India needs to quickly increase the number of skilled workers in material science and chip design.
- Environmental Issues: Permanent solutions are required to address the ecological effects of rare earth mining.
- Global Competition: Taiwan is the world’s top producer of semiconductors, but China owns 60% of the world’s rare earth refinery.
The Path Ahead: A Professional Perspective
According to industry professionals, India has ten years to become a significant participant. India has the potential to become a supply chain powerhouse if it can successfully combine exploration, mining, refining, manufacturing, and research and development.
Economists contend that rather than completely replacing China or Taiwan, India should develop strategic autonomy—the ability to protect its industry from outside influences.
Final Thoughts
India’s focus on Critical Minerals and Semiconductors is not just an industrial strategy—it’s about economic sovereignty, national security, and sustainable growth.
Through exploration, mining, refining, R&D, semiconductor fabs, and global collaborations, India is laying the foundation for a resilient economy. If executed with political will and private sector participation, India could emerge as a world leader in semiconductors, green energy, and advanced manufacturing by 2035.
The message is clear: The world’s fifth-largest economy is gearing up to be not just a consumer, but a global producer and innovator in the critical minerals and semiconductor ecosystem.