New Delhi: India, home to the world’s fifth largest rare earth reserves and equipped with relevant production technology, has the potential to help reduce China’s near-monopoly over critical minerals used in electric vehicles, wind turbines, advanced electronics and defence equipment, according to an article by the Australian Institute of International Affairs.
Rare earth elements (REEs) have moved to the centre of global geopolitics. China currently controls about 90 per cent of global rare earth separation and processing and 93 per cent of magnet manufacturing. This dominance has allowed Beijing to use exports as strategic leverage, including restrictions on shipments to Japan during maritime disputes and more recent controls in trade negotiations with the United States. As geopolitical tensions intensify, countries are seeking alternative and reliable supply chains.
India, however, remains heavily dependent on China for 80–90 per cent of its magnets and related materials. This vulnerability was exposed when China tightened exports during a trade dispute, resuming supply only after India assured that the materials would not be re-exported to the US. Despite significant reserves, India’s rare earth sector has long been underdeveloped. Production has largely been controlled by state-owned Indian Rare Earths Limited, and regulatory barriers discouraged private investment, limiting refining capacity and value addition.
To address these gaps, India launched the National Critical Minerals Mission in January 2025 to expand exploration, processing and domestic value chains. The government has opened critical mineral exploration to private firms and strengthened international cooperation through platforms such as the Minerals Security Partnership (MSP), which includes the US, Japan, Australia and European countries.
In South Asia and the Indian Ocean region, rare earths are increasingly tied to strategic competition. China’s Belt and Road Initiative continues expanding connectivity projects, while US-led Indo-Pacific frameworks aim to build alternative supply chains. Infrastructure, energy corridors and resource security have become central to regional influence.
India’s regional initiatives, including SAGAR (Security and Growth for All in the Region) and its expanded MAHASAGAR framework, promote maritime cooperation, sustainable development and economic connectivity. Integrating rare earth supply chains into these frameworks could foster collaboration with neighbouring countries that possess critical mineral deposits, including Afghanistan, Bangladesh, Myanmar, Nepal, Bhutan and Sri Lanka, where resources remain largely untapped due to technological and financial constraints.
With its resource base, technological capacity and strategic location, India is well positioned to lead regional rare earth value chains. Greater cooperation through the MSP and partnerships with global players such as Australia, the US, Japan and the European Union could help diversify supply networks and reduce excessive global dependence on China. (IANS)
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