How The EU Can Leverage The Current FTA Negotiations To Secure A Mutually Beneficial CRM Partnership With India

As the EU is set to accelerate on its path toward climate neutrality, technological sovereignty and independence, the European Union’s access to Critical Raw Materials (CRM) poses a pressing structural priority, with CRMs playing fundamental roles in the manufacturing of semiconductors, solar panels, wind turbines, and other essential components of the emergent green and digital economy. Despite this apparent strategic importance, the EU relies on a dangerously bottlenecked import base. With China producing 86% of the world’s rare earth minerals, the EU imports 100% of its supply of heavy rare earth elements (REE) from China. Such a dependency transforms CRMs from merely a supply chain concern into a genuine geopolitical challenge. This policy brief argues that CRM integration into the EU-India FTA would be a strategic necessity for the security of Europe’s industrial future.

This policy brief argues that CRM integration into the EU–India Free Trade Agreement would be a strategic necessity for the security of Europe’s industrial future. Such concerns have been compounded by recent developments, as China continues its enforcement of export restrictions, with the most recent of these applied to gallium and germanium, in turn underpinning the urgency of pursuing alternative trade relations. In response, the EU has launched its Critical Raw Materials Act (CRM Act) in March of 2023, setting ambitious targets to minimise the EU’s dependence on any single third country to below 65% for each strategic raw material by 2030. The CRM Act forms what is part of a far broader institutional architecture, which includes the EU’s Green Deal Industrial Plan and Global Gateway, seeking to reframe these raw materials as constitutive of industrial competitiveness and strategic autonomy alike.

Enter India, emerging as an increasingly prominent alternative partner, holding deposits of a variety of rare earth elements (REE), including titanium, bauxite, tungsten, and vanadium. In 2023, for instance, the Geological Survey of India uncovered a 5.9 mt (million tonne) lithium reserve in the territories of Jammu and Kashmir, the country’s first-ever major lithium find. Whilst India has yet to reach its distant and immense full export potential, the state’s intent is clear. In 2019, India passed a reformed National Mineral Policy prioritising an enhancement of exploration, improvement of regulatory transparency, and ultimately a more facilitating environment for private investment within its domestic mining sector. Expectedly, this has been accompanied by the genesis of mineral stockpiling and reforms aimed at streamlining project clearance and land access. As a result, the diplomatic window for capitalisation of this emergent trade potential is wide open.

Authors: Yanis Bourbon (EIAS), Natalie Griffin (UEA), Fred Foley (UEA)

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