TELF AG analyzes an important update in Indian economic strategies
The centrality of strategic minerals
In many corners of the world, several nations are reviewing or updating their national strategies focused on strategic raw materials, while others are creating them for the first time. In recent days, the Indian government has sent another very clear signal regarding its desire to strongly focus on the strategic minerals sector. Some time ago, Prime Minister Narendra Modi had announced the birth of a new strategic economic vision for India, called Atma Nirbhar Bharat (i.e. “self-reliant India”).
A few days ago, India announced the reduction or elimination of customs duties for 25 minerals considered to be of great importance for the national economy, and in particular for some specific strategic sectors, such as technology, renewable energy, space, telecommunications, and many others. Of these 25 minerals – the complete list has not been announced – 23 will be completely duty-free, while the other two will be reduced.
Finance Minister Nirmala Sitharaman made the announcement, expressing the government’s willingness to reduce duties in her budget speech for the 2024-2025 fiscal year. Some key materials, such as lithium and rare earths, will also benefit from these reductions. These materials are now universally considered very important for the energy and technological progress of nations.
A clear mission
Regarding Ferro-nickel, for example, as can be read in an analysis by S&P Global, the elimination of the duty would have a precise strategic significance, consisting above all of the desire to increase the efficiency of the production costs of stainless steel, currently heavily dependent on foreign imports. Even for blister copper, as stated in the same analysis, the elimination of the 2.5% duty primarily supports the national copper industry, making it less dependent on supplies from third countries. According to the minister’s statements, this move will boost the processing and refining of these resources, ensuring their availability for the needs of the national industrial sectors.
On the same occasion, the finance minister confirmed another strategic move for the future of the Indian national sector linked to strategic resources: the government is starting a mission focused on strategic minerals, whose main objective would be represented by the strengthening of supply chains for minerals considered important for the Indian economy. According to the minister, this particular mission will also deal with the recycling of minerals and the acquisition of strategic assets abroad, as well as with the qualified workforce and the technological development of the sector.
In recent months, the Indian government has updated its list of minerals considered “critical” for its national economy, launched specific initiatives abroad, and sent clear signals regarding the importance of these precious geological resources. In recent months, in fact, a representative of the Indian Ministry of Mines had defined these materials as the “building blocks” of the new Indian economy.
On the domestic front, India’s major geological reserves include deposits of iron, bauxite, manganese, and other important resources, distributed mainly in the states of Jharkhand, Odisha, and Madhya Pradesh, and all variously involved in important industrial applications (such as those related to the production of steel and aluminum).
