India-Australia Critical Minerals Partnership

Policy Update
Chetan Gupta

Introduction:

Critical minerals are non-fuel minerals essential for a state’s economic development, national security and green transition. The demand for critical minerals has accelerated as supply chain vulnerabilities have become more pronounced, and critical minerals have become a centre-stage resource in the international arena. The demand for minerals like lithium, cobalt, nickel, rare earth elements, etc. has surged exponentially as they are essential for renewable energy, defence, electronics, transportation (EVs) and other sectors.

India and Australia are key players, and their relationship has significantly evolved from a limited engagement into a comprehensive economic and strategic partnership. In 2020, two countries elevated their bilateral ties to a Comprehensive Strategic Partnership (CSP), while in 2022, the Economic Cooperation and Trade Agreement (ECTA) further strengthened their ties.

Background:

India and Australia have intensified their engagement on critical minerals realizing their strategic importance towards different sectors. Initially, India and Australia signed an MoU, which later formed the Critical Minerals Investment Partnership (CMIP) in March 2022. Australia has committed $5.8 million investment over three years. It aims to encourage Indian investment in Australian critical minerals projects, build robust and sustainable supply chains to help India lower emissions, and become a global manufacturing hub (including for EVs). They have identified five target projects (two lithium and three cobalt) for detailed due diligence under CMIP.

The Union Minister for Coal, Mines and Parliamentary Affairs, Shri Pralhad Joshi and Minister for Resources and Northern Australia Madeleine King during bilateral talks (Source: PIB, GoI)

Moreover, they have established the Australia-India Critical Minerals Research Hub to foster collaborative research in mineral exploration, extraction, processing, and recycling. These building blocks align with India’s launch of the National Critical Mineral Mission (NCMM) 2025, as countries globally are laying out and reorienting their national plans to secure supply chains and self-sufficiency.

Objectives

Building a new supply chain via Australian processed critical minerals to support India’s manufacturing and clean energy goals.
Encouraging co-investment and joint mining, refining and processing projects to consolidate shared ownership and secure mineral access.
Increasing sustainable, diversified, resilient supply chains with circular economy and recycling initiatives. Reduce dependence on dominant suppliers (e.g. China).
Creating a skilled workforce and academic-industry partnership in the mineral processing and innovation sectors via research, technology transfer.
Supporting India’s National Critical Mineral Mission and Australia’s initiatives for the domestic mining and refining sectors.
Helping both countries achieve climate targets and industrial growth by securing access to essential critical minerals.

Critical Minerals specified in Part D of First Schedule of the MMDR Act [24 minerals]

(Source: NCMM Document, Ministry of Mines, GoI)

Functioning:

India and Australia are experiencing rapid growth in the area of critical minerals. In 2023, Australia came up with the Critical Minerals Strategy 2023-2030, and the government started providing assistance and incentives under its Future Made in Australia strategy (2024) to attract more financial investment, strengthen its domestic industry and position itself as a reliable global supplier.

The country has leveraged its mineral-rich geography and strong policy framework to enhance international cooperation. On the other hand, India aims to secure the critical minerals supply chain by ensuring mineral availability from domestic and foreign sources. Australia’s robust policy ecosystem and mature mining sector complement India’s large market, industrial ambitions, and climate goals, making the two natural partners in this space.

Australia has some of the largest reserves of critical minerals. Australia produces nearly half of the world’s lithium and is the second-largest producer of cobalt and the fourth-largest producer of rare earths. Australia positions itself to become a reliable supplier for India’s growing energy requirements.

A bilateral agreement was signed in 2020 between the Ministry of Mines, Government of India, and the Department of Industry, Science, Energy and Resources for Australia, Government of Australia. In 2022, a MoU on Co-Investment in Australian critical minerals projects was signed between Khanij Bidesh India Ltd. (KABIL), under the Ministry of Mines and Critical Minerals Facilitation Office (CMFO), Government of Australia. Eventually, it formalised the India-Australia Critical Minerals Investment Partnership (CMIP) in 2022.

Australia has confirmed a $5.8 million investment in CMIP. It seeks to encourage Indian investment in Australian critical minerals projects. Further signing of the India-Australia Economic Cooperation and Trade Agreement (ECTA) aims to promote growth in Australia’s minerals exports to India by eliminating tariffs on various critical minerals and resources.

Performance:

India’s policy framework initiatives like the National Critical Minerals Mission (NCMM), Production-Linked Incentive (PLI) schemes, and strategic auctions for mineral blocks, emphasize its determination to secure a steady supply of raw materials for its booming manufacturing and renewable energy sectors. At the same time, Australia’s robust mining sector and forward-thinking policy landscape make it a natural supplier capable of filling the supply gaps for key trade partners like India.

India-Australia Critical Minerals Partnership has led to the identification of five projects (two lithium and three cobalt). It aims to build solid and sustainable supply chains between the two countries for key battery minerals. In 2023, Monash University signed MoUs with the Indian Institute of Technology Hyderabad and the International Centre for Excellence in Mining Safety and Automation. It has established the Australia-India Critical Minerals Research Hub to foster collaborative research in mineral exploration, extraction, processing, and recycling.

In 2024, both countries launched two R&D partnerships. First, the India-Australia Critical Minerals Research Partnership (funding of AUD 12.2 million) which focuses on sustainable supply chains. Second, the India-Australia Green Steel Research Partnership ($10.4 million), aiming to reduce greenhouse gas emissions in steelmaking. The Scholars Network is also a co-funding initiative supporting the two partnerships. In 2024, they launched the India-Australia Renewable Energy Partnership, which plans to boost investment in renewable energy projects, including solar manufacturing, battery and mineral processing, green hydrogen, and green iron.

(Source: Ministry of Mines, GoI)

Impact:

The India-Australia critical minerals partnership consolidates both countries’ economic and strategic position by creating resilient and diversified supply chains of critical minerals essential for the clean energy transition and manufacturing sectors. It helps India to reduce reliance on dominant suppliers (like China) and secure resources for EVs and renewable energy industries. The partnership offers Australia new markets and a pathway to utilise its vast critical minerals reserve and reinforce itself as a stable player in global critical minerals supply chains. The partnership between the two countries is a part of broader multilateral dialogues and supply chain security initiatives, such as the QUAD and Mineral Security Partnership (MSP).

Emerging Issues:

Both countries’ regulatory, environmental, and federal-state dynamics are linked to clearance delays which negatively impact mining and processing projects.
There are concerns about intellectual property rights in technology transfer and joint research.
There is a growing demand for responsible sourcing practices and improved ESG (Environmental, Social and Governance) standards in the critical minerals sector to mitigate the negative impacts of mining.
Importance of expanding co-investment, recycling initiatives and skill development for technology and supply chain resilience.
The challenge of aligning India’s growing demand for critical minerals with Australia’s supply capabilities and sustainability goals remains complex amid geopolitical tensions.
It requires long-term commitment as the mining and processing sectors need stable and massive investment, which will eventually only deter the dominance of China.

Way Forward:

India and Australia are strengthening their partnership in the critical minerals sector; however, they need to deepen their collaboration in different components of the critical minerals supply chain (e.g. exploration, mining, processing, manufacturing, etc). Both countries should increase their investment in joint research, technology transfer and skill development to consolidate sustainable mining practices. They can benefit from expanding private sector participation, establishing long-term offtake agreements, financing mechanisms, and infrastructure support. India’s Critical Mineral Mission and Australia’s Critical Mineral Strategy are converging through alignment with this partnership to build a trusted, future-ready critical minerals ecosystem.

References:

Press Information Bureau. (2025, March). India and Australia Launch Joint Critical Minerals Investment Partnership. Retrieved from https://www.pib.gov.in/PressReleasePage.aspx?PRID=2111234
Press Information Bureau. (2024, November). India–Australia Critical Minerals Partnership Takes Shape with New Agreements. Retrieved from https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=2074823

Press Information Bureau. (2025, January). Cabinet approves ’National Critical Mineral Mission’ to power India’s clean-energy future. Retrieved from https://www.pib.gov.in/PressReleasePage.aspx?PRID=2097309
Press Information Bureau. (2023, March). India and Australia Sign Critical Minerals Partnership Agreement. Retrieved from https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=1905863
Press Information Bureau. (2022, March). India–Australia Critical Minerals Partnership: Expanding Bilateral Economic Ties. Retrieved from https://www.pib.gov.in/Pressreleaseshare.aspx?PRID=1810948
Indian Express. (2022, July 5). Explained: What Are Critical Minerals, the Centerpiece of a New India–Australia Collaboration? Retrieved from https://indianexpress.com/article/explained/explained-what-are-critical-minerals-the-centerpiece-of-a-new-india-australia-collaboration-8010268/
Indian Express. (2023, April 16). Experts Explain: Challenges India Faces in Critical Minerals Supply Chains. Retrieved from https://indianexpress.com/article/explained/explained-economics/experts-explain-challenges-india-faces-in-critical-minerals-supply-chains-8566220/
Indian Council of World Affairs (ICWA). (2023). Critical Minerals and India’s Strategic Imperatives. Retrieved from https://www.icwa.in/show_content.php?lang=1&level=3&ls_id=12104&lid=7386
Observer Research Foundation (ORF). (2022). Greening Minerals: India–Australia Partnership to Challenge China. Retrieved from https://www.orfonline.org/expert-speak/greening-minerals-india-australia-partnership-to-challenge-china
Centre for Social and Economic Progress (CSEP). (2023). India–Australia Cooperation: Critical Minerals for Economic Security. Retrieved from https://csep.org/blog/india-australia-cooperation-critical-minerals-for-economic-security/
International Energy Agency (IEA). (2022). Australia–India Critical Minerals Investment Partnership. Retrieved from https://www.iea.org/policies/17873-australia-india-critical-minerals-investment-partnership
Department of Foreign Affairs and Trade (DFAT), Government of Australia. (2022). Australia–India ECTA: Benefits for Australian Critical Minerals and Resources Sectors. Retrieved from https://www.dfat.gov.au/trade/agreements/in-force/australia-india-ecta/outcomes/australia-india-ecta-benefits-australian-critical-minerals-and-resources-sectors
Austrade. (2022). Unlocking Australia–India Critical Minerals Partnership Potential. Retrieved from https://www.austrade.gov.au/content/dam/austrade-assets/global/wip/austrade/documents/Unlocking-Australia-India-critical-minerals-partnership-potential.pdf
Australian Government, Department of Industry. (2021). India Partnership to Boost Australian Critical Minerals Sector. Retrieved from https://www.minister.industry.gov.au/ministers/pitt/media-releases/india-partnership-boost-australian-critical-minerals-sector

About the contributor:

Chetan Gupta is a Research Intern at Impact and Policy Research Institute (IMPRI). He is currently pursuing his MA in International Relations from the Department of International Relations, South Asian University (established by SAARC nations), Delhi. His research areas are International Relations and Public Policy.