With no new US tariffs on critical minerals, India’s race for them will only heat up
With US President Donald Trump deciding not to introduce new tariffs on critical minerals in his announcement on 2 April, India is likely to continue facing stiff competition from other countries in acquiring these minerals, which are used in important sectors such as electric vehicles and semiconductors.
India’s critical minerals mission has, since its inception in July 2024, focused on procuring minerals such as lithium and cobalt from several countries to reduce its dependence on just a few, especially China. The US has followed a similar approach in an effort to reduce China’s dominance in the production and refining of critical minerals.
Status quo on critical minerals
With America now signalling that it is still in the fray to secure as many critical-mineral resources as possible, the race to secure these natural resources is expected to heat up, according to domain experts.
Sankalp Gurjar, assistant professor of geopolitics at Gokhale Institute of Politics and Economics, said, “Trump has decided not to impose tariffs on ‘energy and other certain minerals that are not available in the US’. This is a recognition of the national-security importance of critical minerals. His desire and push for a minerals deal with Ukraine is another sign of this.”
“China’s dominant position in the global critical minerals market is a cause of worry for many countries across the world. It has a direct impact on national security, foreign policy, economic growth and energy transition,” he added.
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When Trump announced reciprocal tariffs on several US trade partners on Wednesday, he refrained from introducing any new trade barriers on critical mineral imports from nations that have large deposits of these. The Democratic Republic of the Congo, for instance, accounts for the about half of the world’s cobalt deposits.
Lithium oxide and hydroxide, cobalt oxides, hydroxides and commercial cobalt oxides, manganese dioxide, and several other critical minerals were exempt from new tariffs and duties, according to annex-II of Trump’s executive order.
The annual mineral commodity summary for 2025 by the US Geological Survey (USGS), published in March, said of the 50 critical minerals the US identified in 2022, it was 100% reliant on imports for 12. Its reliance on imports of lithium – mainly from Latin American nations such as Chile and Argentina – was more than 50% in 2024, the survey said. Reliance on imports of cobalt was about 76%, the survey added, with imports coming primarily from Norway, Japan, Finland, and Canada.
China’s dominance
A September 2023 Goldman Sachs analysis on critical mineral supply chains showed China’s dominant position in the sector. China refines 68% of the world’s cobalt, 65% of nickel, and 60% of lithium of the grade needed for electric vehicle batteries, the report said.
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It also said heightened competition was a clear outcome of the global race to secure supply chains for critical minerals. “We expect geopolitical competition to increase countries’ and companies’ focus on building more resilient and diversified supply chains,” said the Goldman Sachs report, titled ‘Resource realism: The geopolitics of critical mineral supply chains’.
“Critical mineral supply chains will receive particular attention due to their growing importance for the green-energy transition, defense systems, and other high-tech applications, as well as their vulnerability to supply shocks,” it added.
The global salvo to acquire a place in the critical mineral supply chain and reduce China’s dominance in the sector has brought several countries together. For instance, a US-led alliance of 14 nations and the EU called the Minerals Security Partnership (MSP) was formed in June 2022 to address crucial challenges in the sector, and increase the recycling of critical minerals.
“Efforts such as the Minerals Security Partnership were launched to diversify away from the China-dominated supply chains. With or without the tariffs, critical minerals will continue to figure prominently in geopolitics,” said Gurjar of the Gokhale Institute of Politics and Economics.
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