India Eyes Canadian Critical Minerals as Trade Talks Resume
India has resumed trade negotiations with Canada, focusing sharply on securing access to critical minerals essential for its clean energy transition and high-tech manufacturing ambitions. This move comes as both nations seek to revive stalled diplomatic and economic ties, with India aiming to diversify its mineral supply chains and reduce its overwhelming dependence on China.
Focus on Critical Minerals
India’s energy storage, electric vehicle (EV), semiconductor, and solar manufacturing sectors are heavily reliant on materials like lithium, cobalt, nickel, graphite, and rare earth elements. Currently, China supplies over 70% of India’s lithium imports and more than 40% of rare earth elements. In contrast, Canada’s contribution is negligible but highly strategic. With 31 identified critical minerals and a $50 billion export value in 2023, Canada is being seen as a reliable and transparent alternative to China-dominated markets.
Trade Agreement Revival
Trade talks between the two countries had remained frozen for nearly 21 months due to diplomatic tensions but were restarted after a breakthrough at the recent G7 summit. Both governments have now committed to restarting negotiations for an Early Progress Trade Agreement (EPTA), which would lay the groundwork for a full-fledged Comprehensive Economic Partnership Agreement (CEPA).
The new round of discussions is expected to prioritise structured frameworks for joint mineral exploration, long-term offtake agreements, and investment mechanisms that would allow Indian companies to participate in Canadian mining operations.
Strategic and Economic Importance
This move is part of India’s broader ambition to establish secure, diversified, and ESG-compliant critical mineral supply chains. A partnership with Canada would help India de-risk its procurement process, enable stable input sourcing for its growing green economy, and advance its self-reliance goals under the Atmanirbhar Bharat initiative.
Canada’s mining sector, known for its environmental, social, and governance (ESG) benchmarks, adds another layer of attractiveness for India, especially in sectors requiring ethically sourced materials like defence electronics, battery storage systems, and semiconductor production.
Next Steps
- Finalising EPTA with provisions on critical minerals and investment security
- Negotiating long-term supply agreements for Indian industries
- Exploring joint ventures for technology transfer in sustainable mining
