Economic Security in the Indo-Pacific: India-Japan Cooperation on Critical Minerals

The launch of India’s National Critical Minerals Mission (NCMM) in January 2025 and Japan’s 7th Strategic Energy Plan (SEP) in February 2025, places emphasis in each country, on securing supply chains for critical minerals. The initiatives indicate growing strategic convergence and the potential to elevate bilateral relations. This moment provides a timely opportunity to reimagine India–Japan cooperation as a key pillar of Indo-Pacific economic security, especially in a world increasingly shaped by resource diplomacy.

In November 2024, India and Japan convened their inaugural Economic Security Dialogue, emphasising a shared resolve to deepen strategic cooperation in the face of growing geopolitical volatility and technological competition. The statement recognised  that “both sides underscored the need for closer collaboration to protect economic interests, and build resilient supply chains…by way of policy facilitation for business and academic partnership between relevant actors in India and Japan.”

Japan and India have been partnering in the rare earth elements (REEs) space as far back as 2012 but these recent developments signal a shared sense of urgency: both democracies recognise that reliable access to minerals like lithium, cobalt, nickel, copper, rare earths and others is essential for clean-energy goals, industrial growth, and economic security.

This article explores the evolution of the India-Japan economic relationship, Japan’s domestic and international policies in the critical minerals sector, the evolution of India and Japan’s critical minerals cooperation, and the pathways for enhancing this partnership.

Geostrategic convergences underlining the India-Japan partnership

The India–Japan partnership is anchored in a broader partnership of shared values and economic ties. Both nations elevated their relationship to a Special Strategic and Global Partnership in 2014, built on democratic governance, rule of law, and civilisational links. Economically, their ties are institutionalised by landmark agreements. The 2011 India–Japan Comprehensive Economic Partnership Agreement (CEPA) is among India’s most comprehensive free-trade pacts, covering goods, services, and investment. This has liberalised over 94% of bilateral trade and spurred investment. India and Japan also coordinate through multiple joint forums. For example, the Industrial Competitiveness Partnership (launched in 2021) and the Clean Energy Partnership (CEP, launched in 2022) are agreements that foster joint ventures and financing in energy, steel, textiles, and advanced manufacturing. Japan pledged ~JPY 5 trillion (USD 42 billion) of public and private Japanese investment over five years for projects in India.

Concrete projects underline this industrial collaboration. Indian and Japanese firms are already working together on rare earths and clean energy. In the minerals sector, for example, Toyota Tsusho (a trading arm of Toyota Group) partnered with India’s Indian Rare Earths Limited (IREL) as far back as 2012, to separate and refine rare earths mined in India. This collaboration paved the way for Toyota Tsusho’s subsidiary, Toyotsu Rare Earths India, which processes thousands of tons of Indian rare earth oxides and purifies them for export back to Japan. Such ventures help Japan’s industries (automotive, electronics, defence) secure supply of magnet-grade rare metals, while giving India value-added industrial capacity. In clean energy, Japanese companies are also active partners. For instance, in 2022 DENSO Kirloskar Industries (a Japanese-Indian JV) installed solar-powered water-pumping systems in rural Karnataka to recharge aquifers and promote carbon-neutral water supply. This illustrates how Japanese expertise in green tech and manufacturing supports India’s sustainable infrastructure.

These ties are underpinned by shared multilateral interests. Both India and Japan are founding members of the Quad. They also coordinate in forums like the International Solar Alliance (ISA), the Mission Innovation, and the Indo-Pacific Economic Framework (IPEF) with partner countries. Under the Quad’s 2023 Summit, the leaders even launched the Quad Investors Network (QUIN) – a forum of major institutional investors and companies from each country – to co-invest in “critical technologies” and strengthen resilient supply chains.

India–Japan relations are deep and diverse: grounded in shared values and democracy, backed by agreements like CEPA, and exemplified by joint projects such as rare-earth refining with IREL amongst various other industrial and business level collaborations. This broad partnership provides a strong foundation for jointly tackling the challenges of critical mineral security.

Japan’s domestic ecosystem for energy security

Japan’s evolving strategy on critical minerals is deeply shaped by both past disruptions and forward-looking priorities. The 2010 incident with China, when rare earth exports were curtailed, served as a turning point, prompting Tokyo to strengthen the institutional role of the Japan Organization for Metals and Energy Security (JOGMEC) formerly called Japan Oil, Gas and Metals National Corporation. This allowed the agency to directly invest in overseas mining projects and secure access to vital inputs. Within a decade it slashed its reliance on Chinese rare earths from about 90% to roughly 58%. Japan invested in overseas mining projects, built strategic stockpiles, and supported new recycling and substitution technologies. For example, Japan’s Shin-Etsu Chemical has long operated world-class facilities for rare-earth separation, using advanced solvent-extraction methods since the 1960s. The momentum intensified after subsequent crises, notably the 2011 Fukushima disaster and, more recently, Russia’s invasion of Ukraine—both of which exposed Japan’s vulnerability due to its high dependence on imported energy and minerals.

In response, Japan’s domestic policy has become more assertive and structured (see Table 2). The approval of the 7th Strategic Energy Plan (SEP) in February 2025 reflects a major shift in how Tokyo approaches critical mineral security. The plan identifies copper and battery materials as essential for the country’s green transition, setting the tone for new initiatives. Financial tools and public-private partnerships are being deployed to support Japanese companies in acquiring overseas mining assets, while domestic capabilities are being enhanced through mineral recycling and exploration of seabed resources, especially in areas near Japan’s coastline that have shown promising reserves.

At the same time, Japan is paying closer attention to the environmental implications of deep-sea mining, with sustainability principles increasingly guiding its domestic exploration strategy. Taken together, these developments signal a broader effort by Japan to build greater technological autonomy and supply chain resilience, while remaining open to strategic international partnerships to meet its long-term critical mineral needs.

…these developments signal a broader effort by Japan to build greater technological autonomy and supply chain resilience, while remaining open to strategic international partnerships to meet its long-term critical mineral needs.

Strategic Alignment: India–Japan cooperation for critical minerals

India and Japan share a large majority of critical minerals in their official lists, with over 20 minerals in common (see Table 3), reflecting strong alignment in their strategic focus areas for technology, energy, and security.

The history of India–Japan cooperation in resources and clean energy goes back decades and has accelerated in recent years. Their partnership has evolved from general development aid to strategic joint initiatives. For example, Japan’s Official Development Assistance (ODA) to India originally focused on infrastructure (e.g. the Delhi–Mumbai Industrial Corridor and Mumbai–Ahmedabad bullet train), but has expanded to high-technology and green growth. Likewise, institutional mechanisms such as the India–Japan Energy Dialogue (est. 2006) and Steel Dialogue (est. 2020) integrate discussions of resource inputs and efficiency. Under the Clean Energy Partnership (CEP), Japan has extended over ¥300 billion (US$2.7 billion) loans for solar and wind projects. These ongoing frameworks mean that resource security is not a side issue, but a core part of planning: access to minerals like lithium for batteries or rare earths for wind turbines is built into energy and industrial planning.

These ongoing frameworks mean that resource security is not a side issue, but a core part of planning: access to minerals like lithium for batteries or rare earths for wind turbines is built into energy and industrial planning.

Within this context, rare-earth collaboration is a flagship example. The IREL–Toyota Tsusho joint venture demonstrates a long-term, sustained engagement. After the 2012 MoU and launch of Toyotsu Rare Earths India, both sides continue exploring further steps. But the cooperation can go beyond a single commodity. Japan’s can shared its newly developed deep-sea mining technology with India’s nascent efforts, dovetailing with India’s own Deep Ocean Mission. Meanwhile, India’s ambition to build gigafactories and expand EV production creates demand for Japanese battery technology and minerals. In both cases, joint labs and Research and Development (R&D) can be established. For example, partnerships between Japan’s National Institute of Advanced Industrial Science & Technology and Indian Institutes for Technology or the various labs under the Council of Scientific and Industrial Research, could be considered.

India–Japan mineral collaboration is already woven into a larger tapestry of industrial development and infrastructure investment.

Thus, India–Japan mineral collaboration is already woven into a larger tapestry of industrial development and infrastructure investment (see Table 1). Japanese investment and technology help build up India’s renewable energy capacity and semiconductor labs, both of which hinge on reliable mineral inputs. Conversely, India’s growing manufacturing base and resource potential allow Japan to mitigate supply risks. Together, they are turning the shared strategic vision of a diversified, resilient Indo-Pacific economy into concrete action – from tying supply chains in Quad initiatives to implementing the ambitious Clean Energy Partnership loans. All these efforts not only address energy transition goals, but also strengthen economic security: by ensuring neither country can be easily cut off from the minerals needed to sustain its industries and clean-tech future.

Table 1: India-Japan cooperation in the critical minerals sector

Source: Authors compilation based on various sources. Not exhaustive.

Strengthening Ties

India emerged at the most promising destination for Japanese business investments according to a 2024 survey by the Japanese Bank for International Cooperation (JBIC) surpassing China and Southeast Asia. This potential of expanding investment in India could also find resonance within the emerging critical minerals sector. To realise the full potential of India-Japan cooperation on critical minerals, targeted and strategic interventions are essential. The following policy options outline key areas where bilateral collaboration can deliver long-term economic and strategic gains.

1. Leverage the QUIN: India and Japan could channel QUIN’s funding into joint ventures for mineral processing in India, such as lithium or rare earth refineries. Harmonised export-credit and insurance support from Quad countries can enable long-term Japanese investment, framing these projects as strategic Quad-tech infrastructure.
2. Pursue triangular cooperation in Africa: New Delhi and Tokyo may consider joint investments in mining and logistics infrastructure in Africa and Southeast Asia. Through mechanisms like the India-Japan Cooperation Initiative for Sustainable Economic Development in Africa, they can co-finance extraction and transport, pool technical expertise, and offer coordinated bids to reduce Chinese dominance in resource-rich regions.
3. Promote a circular economy for minerals: India and Japan can assess opportunities to co-develop recycling technologies and urban mining capacities. Indo-Japanese R&D hubs and recovery plants for EV batteries or e-waste in India would strengthen domestic supply loops, reduce imports, and enhance sustainability.
4. Collaborate on green extraction and processing technology: The two countries can consider launching a joint Clean Metals Research Hub to develop eco-friendly mining and processing methods. This could include robotic mining, zero-waste processing, or safe handling of radioactive materials, drawing on Japan’s tech expertise and India’s operational scale. It could be jointly funded by Japan’s Science and Technology Agency and India’s Department of Science and Technology, with industry partners co-financing.
5. Invest in industry capacity-building and human capital: To ensure project success, Japan can consider investing in Indian training programs in mining and materials engineering, including expanding Japan-India Institutes for Manufacturing (JIMs) and technical exchanges. Building a skilled workforce and aligning operational standards will ensure long-term strategic compatibility for critical mineral partnerships.

By taking these steps, India and Japan would not only bolster their own economic security but also set an example of partnership. Joint processing hubs, co-financed mines abroad, circular-economy networks and collaborative labs would create redundancies and resilience in supply chains. Each suggestion is a concrete building block: they enable shared investments and technology exchange, reduce reliance on any one supplier (particularly China), and smooth the path of commodities from mine to factory. In an era where critical minerals power clean energy and digital industries, an India–Japan alliance makes strategic sense and reflects shared democratic values. Together, they can translate their growing Special Strategic and Global Partnership into tangible supply-chain security – strengthening both economies while supporting global efforts for a diversified, sustainable future.

Annex

Table 2:  Japan’s international partnerships and policy initiatives on critical minerals

Source: Authors compilation based on various sources. Not exhaustive.

Table 3: Critical Minerals on India and Japan’s lists (Updated as of June 2025)

Source: Author’s compilation based on various sources.

Note: The author would like to thank Tejal Karad, Research Intern, CSEP for her research assistance and Dr. Constantino Xavier, Senior Fellow, CSEP for his feedback..