India enjoys considerable goodwill and strategic dominant position over China in this region and supply lines would be away from direct Chinese influence. IOR is also a prolific mineral rich region where most governments have mining and exploration friendly policies and welcome investment through friendly policy levers. Most of the countries in the region particularly East Africa, Madagascar, and SE Asia have a sizeable population having historical family and business ties with India.
– by Dr. Amit Tripathi, Director, MPXG Exploration
As industrial fallout of recent standoff with China plays out, it has become agonizingly clear that critical Indian industrial supply chains are very China dependent for components and raw material. Requirement of diversifying these critical supply chains away from Chinese influence is forcing a rethink in Indian industry and government circles.
Best possible alternative would have been to rapidly boost domestic mineral exploration and mining. However, the policy quagmire of revenue maximization and excessive controls have rendered the mining policy incompatible with global best practices and created a stalemate and import dependence increasing. Foreign investors in exploration have all shut shop and quietly left after cutting their losses. The price of a bad reputation will be paid by the next generation that actually tries their hand at reforms. History is a harsh judge, however, the powers that be have never realized it while still has been a chance. While the surviving Indian explorers wait for relevant reforms to the mining policy, the second best option for downstream industry is to secure these raw material supplies from countries of the Indian Ocean Region (IOR). Best to do that before governments start “helping.”
India enjoys considerable goodwill and strategic dominant position over China in this region and supply lines would be away from direct Chinese influence. IOR is also a prolific mineral rich region where most governments have mining and exploration friendly policies and welcome investment through friendly policy levers. Most of the countries in the region particularly East Africa, Madagascar, and SE Asia have a sizeable population having historical family and business ties with India. No other country enjoys such a unique strategic network anywhere in the world. This is a unique strength that can be leveraged to meet the critical metal requirements of the country. The Indian diaspora in the IOR are prominent businesses and have excellent network in the host countries’ government, administration, businesses and often control large part of domestic inland supply chains. Traditionally these expat networks have been wary of dealing with government, however, over last two decades, with sustained networking support, Indian missions have built a significant goodwill within these expat network. These networks, if consolidated and developed through sustained policy tools can help Indian businesses meet their raw material requirements. Having worked overseas for very long time, it can be said form personal experience that if a business requirement is provided, these networks immediately get activated to fulfilled the requirement very rapidly.
Formalizing these existing networks is extremely more efficient and cost effective than large government to government delegations. Need of the hour is to formalize and expand these networks using Indian missions, meet longstanding demands of these expat Indian and Indian origin groups and build a goodwill. Ease of travel, visa on arrival for Indian travelers (not just the white or red passport), direct flight connectivity to Tier 2 and Tier 3 cities, dedicated commercial section on every Indian mission website to support networking and business transactions etc would go a long way in rapidly up-scaling and activating these networks. Ministries of Mines and Industry need to work with Foreign Ministry. The Indian government should not be shy of asking help when needed, expats would definitely rise to the occasion. This initiative would best be done in a government to expat private mode. The government needs to facilitate, business happens automatically.
This article is an expanded version of the quotes that were provided to Financial Express Online however this article was published after the FE article: https://www.financialexpress.com/defence/rare-earth-elements-indias-critical-strategic-deficiencies-and-chinas-dominance-problems-and-solutions/2044472/