Harnessing India’s bauxite reserves to power manufacturing growth and reduce import dependence

THEBUSINESSBYTES BUREAU

BHUBANESWAR, JANUARY 11, 2026

India stands at a decisive moment in its industrial evolution. Having recently emerged as the world’s fourth-largest economy, surpassing Japan, the country’s growth momentum has been propelled by a renewed thrust on domestic manufacturing, infrastructure expansion and reduced import dependence. From electronics and defence to renewable energy, policy initiatives aimed at strengthening local value chains have begun to yield results. Yet, beneath this progress lies a striking contradiction. Despite possessing vast reserves of bauxite — the primary raw material for aluminium — India continues to rely heavily on imports to sustain its expanding aluminium value chain. This paradox not only drains valuable foreign exchange but also undermines strategic autonomy in critical sectors such as defence, electric mobility, construction and clean energy, while constraining job creation and regional development.

 “India is resource-rich when it comes to bauxite. Government and industry estimates place the country’s bauxite resources at nearly 3.9 billion tonnes, a significant share of which is metallurgical grade and suitable for aluminium production. These reserves are spread across Odisha, Jharkhand, Gujarat, Maharashtra, and Madhya Pradesh, with the eastern belt, particularly Odisha, emerging as the leading bauxite-producing state. Districts such as Kalahandi, Koraput, Sundargarh, Bolangir, and Sambalpur host some of the country’s richest deposits, offering a strong foundation for long-term raw material security if effectively harnessed”, said Dr. Sridhar Panda, former Professor of Geology, Berhampur University.

Despite this abundance, India’s bauxite imports have climbed steadily in recent years, signalling a widening gap between domestic supply and rising demand. In 2023, the country imported over 3.7 million tonnes of bauxite, about 6 per cent higher than the previous year. The trend intensified in 2024, with imports jumping by nearly 20 per cent to more than 4.5 million tonnes as aluminium plants and downstream industries expanded capacity. Trade data from 2025 further reveal thousands of bauxite consignments arriving from countries such as Guinea and China, as well as European trading hubs like the Netherlands, highlighting the depth of India’s growing import dependence.

Dr. Panda added, “The consequences of this reliance extend well beyond raw material volumes. Aluminium imports, including semi-finished products, now account for more than 55 per cent of domestic demand, imposing a cost of tens of thousands of crores on the economy each year. Import values have reportedly risen by 72 per cent over the past five years, reaching nearly ₹78,000 crore in FY26. This sustained outflow of foreign exchange exposes Indian manufacturing to global price volatility, supply chain disruptions, and geopolitical risks. Such vulnerabilities sit uneasily with national ambitions under Atmanirbhar Bharat and the Aluminium Vision 2047 released by the Ministry of Mines, both of which emphasise resilient domestic supply chains for critical materials.”

Demand pressures are set to intensify further as aluminium becomes increasingly indispensable to modern infrastructure, electric vehicles, aerospace, railways and renewable energy installations, owing to its light weight, strength and recyclability. Projections under Aluminium Vision 2047 suggest that India’s aluminium requirement could exceed 8 million tonnes per annum by 2030, up from around 5.5 million tonnes currently. While domestic primary aluminium production has reached about 4.2 million tonnes in FY2025 and major producers are planning capacity expansions, long-term growth hinges on assured access to raw materials — something imports alone cannot reliably ensure.

 “India’s reliance on bauxite imports is therefore not a consequence of resource scarcity but a structural and policy gap. Domestic bauxite production crossed 23 million tonnes in 2023, yet new mine development has lagged due to complex land acquisition processes, regulatory delays, and inadequate infrastructure in mineral-rich regions. As a result, economically viable deposits remain underutilised while producers turn to foreign ore to meet immediate needs. Streamlining approvals, investing in logistics, strengthening community engagement, and adopting responsible mining practices can unlock domestic reserves at scale and support long-term supply security”, added Dr. Panda.

Reducing import dependence offers dividends beyond economics. Aluminium is increasingly recognised as a strategic metal, central to energy transition and national security. Reliable access to domestic bauxite would shield India from external shocks while catalysing employment, infrastructure development and value addition in some of the country’s most underdeveloped regions.

With vast reserves lying untapped and imports rising steadily, India now faces a clear choice. Prioritising responsible and efficient domestic bauxite mining is no longer optional — it is essential. For policymakers and industry alike, the path forward is evident: sustainable industrial growth must be anchored in India’s own mineral strength to secure long-term manufacturing resilience and economic independence.