The Union Budget for 2024-25 has introduced several pivotal measures aimed at addressing India's needs in the critical minerals sector. This development reflects a pragmatic approach to enhancing productivity and growth through strategic resource management.
Reducing Tariffs and Launching the Critical Minerals Mission
One of the standout features of the budget is the reduction in tariffs for a range of critical minerals. This move is complemented by the announcement of a flagship Critical Minerals Mission (CMM), highlighting the government's commitment to establishing India as a key player in the global critical minerals market. The tariff reductions, which apply to essential materials such as antimony, cobalt, and lithium, aim to lower the cost of imports, thus supporting industries reliant on these resources, particularly in electronics and green technologies.
Objectives and Implementation of the Critical Minerals Mission
The Critical Minerals Mission is designed to boost domestic production, facilitate overseas acquisitions, and foster technological advancements. The mission sets ambitious goals, including the development of domestic production capabilities and the acquisition of critical mineral assets abroad. It also emphasises technology development, workforce skilling, and the establishment of a robust Extended Producer Responsibility (EPR) framework. This comprehensive approach aims to reduce supply risks associated with geopolitical tensions and natural limitations, potentially enhancing the stability and resilience of India's critical mineral supply chain.
Addressing Challenges and Ensuring Success
For the Critical Minerals Mission to succeed, several key challenges must be addressed. Firstly, there needs to be a balance between increasing domestic production and developing necessary infrastructure for storage and processing. The current lack of processing capacity could limit the effectiveness of tariff reductions, so investments in refineries and processing units are crucial.
Secondly, the implementation of an EPR framework that meets international standards will be vital in promoting a circular economy, helping to address supply gaps through product recovery and reuse. Thirdly, securing international partnerships through Free Trade Agreements (FTAs) and focusing on Research and Development (R&D) for processing technologies are essential steps. These strategies should be accompanied by initiatives to enhance Intellectual Property (IP) acquisition and refine new technologies.
Conclusion
The Union Budget’s focus on critical minerals represents a significant shift towards recognising and addressing the strategic importance of these resources. Get more information about the issue in a detailed article here.