The global energy transition is increasingly shaped by critical minerals supply chains, where materials like lithium, nickel, cobalt, graphite, and rare earth elements define the pace of electrification. Southeast Asia and India sit at the center of this transformation, holding vast raw material reserves while struggling to convert geological wealth into industrial and technological value.
An OECD assessment highlights a persistent imbalance: strong upstream resource dominance, but weak downstream processing and limited value capture. This structural gap is reshaping global trade, investment flows, and geopolitical competition in the tech and battery materials sector.
Southeast Asia’s Nickel Powerhouse and Raw Material Dominance
Southeast Asia plays a decisive role in global nickel supply chains, controlling around 46% of global reserves. Indonesia and the Philippines together account for approximately 68% of global nickel production, making the region indispensable for electric vehicle (EV) batteries and energy storage systems.
Beyond nickel, the region also holds significant shares of bauxite, tin, cobalt, graphite, and rare earth resources, reinforcing its importance in the global raw materials economy. However, despite this resource strength, most value is still captured outside the region. China remains the dominant player in refining and battery manufacturing, exporting $66.3 billion in battery packs in 2023 and controlling large segments of global processing capacity. This concentration means Southeast Asia supplies the inputs but rarely controls the final industrial output.
India’s Critical Minerals Gap in the Tech Supply Chain
India represents another major pillar of global critical minerals potential, holding around 7–8% of global rare earth reserves along with emerging deposits of graphite and lithium. However, development remains limited, with only 10–20% of mineral potential currently utilized.
This underdevelopment has created a deep structural dependency. India remains 100% import-dependent for lithium, cobalt, and nickel, spending approximately $1.3 billion annually on battery materials. As EV adoption accelerates, this dependency is becoming a strategic vulnerability in the global tech and energy transition supply chain.
Despite strong upstream resources, Southeast Asia and India struggle to build competitive downstream industries. Refining, chemical conversion, and battery manufacturing remain concentrated in China, which dominates nearly every stage of the value chain. This imbalance results in a structural inefficiency: resource-rich economies export raw materials, while high-value production—batteries, cathodes, and advanced components—occurs elsewhere. As a result, most economic gains from the lithium and nickel economy are captured outside the region.
Indonesia’s Industrial Push in Nickel and Raw Materials
Indonesia is the clearest example of industrial policy reshaping the raw materials sector. Through export bans on unprocessed nickel and aggressive downstream investment policies, the country has developed more than 40 nickel processing facilities.
This strategy has turned Indonesia into the world’s largest refined nickel producer. However, much of the investment and technology comes from China, meaning that while Indonesia captures more value than before, it still remains partially dependent on external capital and processing expertise. Environmental pressures also continue to grow, particularly due to energy-intensive refining methods used in nickel processing for battery-grade materials.
Fragmented Strategies Across ASEAN and India
Across ASEAN, approaches to critical minerals development remain inconsistent:
- The Philippines is balancing export controls with foreign investment attraction
- Vietnam is building rare earth processing and magnet manufacturing partnerships
- Malaysia and Thailand are focusing on downstream electronics and battery components
India, meanwhile, is pursuing a broader strategy through its National Critical Minerals Mission, aiming to secure supply chains through domestic development and overseas acquisitions. Institutions like KABIL are actively investing abroad to reduce import dependency in lithium and nickel markets.
Geopolitical Pressure and Export Restrictions on Raw Materials
Global supply chains for raw minerals and tech metals are becoming increasingly politicized. Export restrictions have increased more than fivefold since 2009, now affecting over 20% of global mineral trade.
China’s controls on graphite, gallium, and germanium, combined with Indonesia’s nickel export restrictions, reflect a broader shift toward resource nationalism. These policies are reshaping industrial planning across EV manufacturing, semiconductors, and renewable energy technologies. At the same time, Western policy frameworks such as the EU’s Critical Raw Materials Act and the US Inflation Reduction Act are accelerating efforts to diversify supply chains away from concentrated sources.
Despite rising demand, global investment in mining and raw material extraction is weakening. Foreign direct investment fell to $1.49 trillion in 2024, while extractive-sector greenfield projects dropped sharply to around $40 billion. This creates a structural mismatch: demand for lithium, nickel, and battery metals is rising rapidly, but capital deployment is slowing. Without renewed investment, supply constraints could intensify across global tech and EV markets.
The long-term outlook remains strong. Southeast Asia alone is expected to reach 8.5 million EV sales by 2035, while the regional green technology market could expand from $5 billion in 2020 to $50 billion by 2050. This surge reinforces the importance of critical minerals supply chains, particularly for lithium-ion batteries, energy storage systems, and renewable infrastructure.
Structural Challenge: Resource Wealth Without Industrial Control
The central issue across Southeast Asia and India is not resource scarcity but system fragmentation. Upstream mining, midstream refining, and downstream manufacturing remain weakly integrated. Export bans may encourage domestic processing, while environmental regulation can slow project development. Meanwhile, foreign investment remains essential but often comes with external control over technology and infrastructure. This creates a paradox: countries supply the world with raw materials essential for the tech and energy transition, yet struggle to fully participate in the value creation process.
