How the AI revolution needs a reliable critical mineral supply chain

India has officially joined the Pax-Silica, the US-led alliance, in order to foster responsible innovation and resilient infrastructure. Artificial intelligence (AI) is today not viewed only in terms of software or data-driven algorithms, but also it is seen as a source of accessible information, modern governance and infrastructure transformation. At the India-AI Impact Summit 2026, government officials, industry leaders and multilateral institutions have emphasised that access to computing power and data infrastructure are prerequisites for leveraging AI for economic growth, improving health infrastructure and linking innovation for measurable development impact.

For a country like India, which aspires to become a leading global power in the technological and digital arena, India’s AI ambitions will ultimately depend on how it secures its critical minerals supply chain. India becoming a global AI hub rests on expanding domestic computing capacity, strengthening electronics manufacturing, and fostering indigenous innovation ecosystems. However, for the AI revolution, a resilient critical mineral supply chain is an imperative, as critical minerals form the material backbone of AI.

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Advanced semiconductors, high-performance computing systems, hyperscale data centres and next-generation defence technologies require specialised mineral inputs. Gallium and germanium are required for semiconductor manufacturing, while rare earth elements (REE) are essential for enabling magnets that are required in servers and cooling systems. Lithium, cobalt and nickel are essential for energy systems that are required to sustain energy-intensive data infrastructure.

As AI models grow larger and computing requirements expand, demand for these minerals will rise in parallel, creating a link between technological advancement and resource security. Currently, the supply chain of these critical minerals is geographically concentrated. This has led to supply chain vulnerabilities, as this concentration has been used as geopolitical leverage.

India is entirely import dependent on lithium, cobalt, nickel and germanium, while gallium too has been categorised as high economic importance as well as high supply risk. China has an overwhelming dominance in REE processing. As per the International Energy Agency (IEA), China currently accounts for 91 per cent of global processing capacity. The Government of India realises the importance of these critical minerals, and in 2025, the government launched the National Critical Mineral Mission (NCMM) and made amendments to the Mines and Minerals (Development and Regulation) Act, 1957, to boost the critical mineral sector. The purpose of NCMM is to establish a robust framework in order to achieve self-reliance in the critical mineral sector. The government has also leveraged bilateral and multilateral relationships to achieve self-reliance in the critical mineral sector.

In this budget, Union Finance Minister Nirmala Sitharaman announced rare earth corridors in four states – Tamil Nadu, Odisha, Andhra Pradesh and Kerala – to promote mining, processing, research and manufacturing. However, India must move towards developing an ecosystem that connects exploration, extraction, processing, manufacturing, recycling and technological innovation, as securing critical minerals for AI requires a whole-of-economy approach rather than specific-sector intervention.

India needs to boost its exploration efforts. India is an underexplored country. It is estimated that only 20 per cent of India’s geological wealth has been explored. There is a need to ramp up geological surveys, advanced mapping technologies, and data-sharing platforms in order to attract investment. The use of AI through predictive geological modelling and satellite-based assessment can shorten discovery timelines and reduce investment risks associated with critical minerals. India also has to prioritise building processing and refining capacities, as exploration of reserves alone does not guarantee reliable supply chains needed for AI advancement.

India is the third largest e-waste generator. In 2025, India generated 2.2 million metric tonnes (MT) of e-waste, and it is expected to double by 2030. India needs to leverage e-waste and recover critical minerals from it. This will also contribute to the circular economy. Lastly, India needs to leverage its relationship in the Global North and Global South to build a reliable supply chain that supports an accessible, safe AI.

(Trishala Anand Sancheti is Research Fellow at India Foundation. Views expressed are personal and solely those of the authors. They do not necessarily reflect Firstpost’s views.)