Two unnamed Indian government officials confirmed on May 12 that India and Russia have shared a draft bilateral agreement on critical minerals covering lithium and rare earths, with corporate investment facilitation mechanisms under discussion. The pact is expected to be signed within two months. India's Ministry of Mines is leading the talks. No dollar figures have been disclosed, and the Ministry declined to comment when asked by Reuters. What looks like a straightforward bilateral minerals deal is actually a signal that India, the world's third-largest economy, is building a supply chain outside the Western frameworks that Washington has spent the past eighteen months constructing.
The context matters more than the headline. The United States, through its FORGE (Framework for Advancing Responsible Critical Minerals Trade) initiative, signed eleven bilateral minerals agreements between February 2025 and February 2026 with Argentina, Ecuador, Guinea, Morocco, Peru, the UAE, and others, a deliberate effort to create Western-aligned alternatives to Chinese dominance in minerals processing. Meanwhile, India has been a strategic partner in U.S. tech and defense circles. Yet India is simultaneously deepening its minerals relationship with Russia, a move that suggests New Delhi sees hedging against both Beijing and Washington as the rational play. The real constraint in critical minerals is not extraction, it is processing and refining. The top three processors now control 86 percent of global refining capacity across copper, lithium, nickel, cobalt, graphite, and rare earths, up from 82 percent in 2020. Almost all that growth came from China. India has become dependent on processed mineral imports for its own manufacturing and battery ecosystem; Russia holds significant lithium and rare earth deposits in the Kola Peninsula and Siberia but lacks modern processing infrastructure. A bilateral agreement between them could, if structured correctly, create a second processing hub outside of Chinese and Western control.
The agreement being negotiated covers exploration, processing, and technological collaboration, with both governments set to facilitate corporate investments, language that typically means state-owned enterprises will be named as lead parties. India's side likely involves NMDC (National Mineral Development Corporation) or KABIL (Khanij Bidesh India Limited), the state vehicles for critical minerals overseas; Russia's side would probably include Rosatom or Norilsk Nickel, which already operates major nickel and palladium mining and refining operations in Siberia. The draft has been shared with Russian counterparts but has not yet been reviewed by the full cabinet or formally announced by either government. Both sides indicated a two-month timeline to signature, placing the formal signing around July 2026. Neither government has committed to specific lithium or rare earth volumes, processing capacity targets, or investment amounts.
Why this happened now has three parts. First, India's domestic battery and EV manufacturing ambitions require reliable, long-term critical minerals supply, and that supply is increasingly expensive and politically constrained when sourced through Western-aligned frameworks or Chinese processors. Second, Russia has been effectively locked out of Western minerals markets since 2022; deepening relationships with non-aligned players like India is Moscow's primary strategy to maintain minerals revenue and geopolitical relevance. Third, the U.S. has made critical minerals central to its industrial and defense strategy (the January 2026 Section 232 processed critical minerals framework made it explicit), which means any non-U.S. sourcing route now carries explicit geopolitical weight. India sees a Russia partnership as a way to secure supply without fully subordinating its minerals strategy to Washington.
Who wins and who loses is clear. India gains a second supply channel for lithium and rare earths outside of Chinese processors and Western-aligned frameworks, a genuine strategic asset. Russia gains a major economy customer for its mineral resources and a way to offset Western sanctions. China loses some leverage over India's critical minerals supply (though China still dominates processing). The United States loses the exclusive minerals partnership it has been cultivating with India, and the FORGE framework loses credibility if India, a G20 member and U.S. strategic partner, chooses Russia. The real read: this is not about one pact, it is about the minerals supply chain splintering into three competing networks: a Chinese-dominated processor hub, a Western-aligned FORGE framework that is capital-intensive but politically fragile, and now a Russia–India corridor that prioritizes non-alignment and sovereignty over Washington's preferences.
Watch three things. First, the formal signature: if either government announces the pact before July 2026, it confirms both sides are committed. If the announcement slips, it signals internal disagreement or cooling relations. Second, which state-owned enterprises are named and what capacity commitments they make, this will determine whether the pact is symbolic or material. Third, whether the U.S. Commerce Department or USTR formally objects to the agreement or treats it as a constraint on U.S.–India minerals partnerships. If the U.S. does not respond, it means Washington has accepted that India will hedge its minerals sourcing. If it does, expect pressure on India to choose between the Russia corridor and expanded FORGE participation, a choice India will likely defer or refuse.