India and the EU's Shared Imperative on Critical Minerals - ORF…

Sarah J · 2026-05-07T15:09:44.000Z

Published by the Observer Research Foundation (ORF) in May 2026, this brief argues that India and the EU face the same fundamental problem — over-reliance on China for critical minerals — and that working together is a practical and strategic solution for both sides. Critical raw materials such as lithium, cobalt, and rare-earth elements are essential for batteries, wind turbines, semiconductors, and military hardware. China's dominance in processing these materials — including its 2023 export restrictions on gallium, germanium, and graphite, and its 2025 restrictions on rare earths — has exposed Europe and India to serious supply chain vulnerabilities. India and the EU are not geopolitical rivals, which creates the scope for a deeper partnership. In 2024-25, bilateral goods trade reached US$136.54 billion, making the EU India's largest goods trading partner. Crucially, nearly 70 percent of the 30 minerals classified as critical by India also appear on the EU's own critical raw materials list, reflecting deeply shared priorities. Both sides have ambitious clean energy targets that will dramatically increase mineral demand. The EU aims to cut emissions by at least 55 percent by 2030 and reach climate neutrality by 2050, while India targets net-zero by 2070 and 500 GW of non-fossil fuel capacity by 2030. India's demand for critical minerals could rise five to six times by 2040. The ORF argues the tools for cooperation already exist — the challenge is connecting them. The EU's Global Gateway can offer guarantees and blended finance to make risky overseas mineral projects viable. The India-EU Trade and Technology Council can develop shared emissions and traceability standards. The Minerals Security Partnership, which India joined in 2024, provides a governance framework to screen projects and align ESG standards. The EU's Carbon Border Adjustment Mechanism (CBAM), which entered its definitive phase in 2026, could act as a market incentive for cleaner mineral production rather than purely a barrier — creating demand for well-reported, lower-carbon supply chains in which India could play a growing role. The brief's core recommendation is triangular cooperation: EU technology and finance combined with resource-rich countries in Africa or Latin America, while India contributes processing capacity and manufacturing demand — helping both India and the EU build mineral value chains while supporting resource-rich economies. https://www.orfonline.org/research/india-and-eu-s-shared-imperative-of-critical-minerals-cooperation

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India and the EU's Shared Imperative on Critical Minerals - ORF… | SEINET