NEW DELHI — India is racing to secure its supply of rare-earth minerals, the hidden backbone of modern technology, as China tightens its grip on global production and processing. With Beijing controlling over 60% of mining and 85% of refining capacity, India’s push for strategic autonomy in critical minerals has become a national security priority—one that could reshape supply chains, defense manufacturing, and the global clean-energy transition.
The urgency follows China’s increasingly assertive use of “chokepoint politics,” a strategy where economic leverage over essential resources is wielded to advance geopolitical goals. A recent analysis by the Observer Research Foundation (ORF) warns that India’s dependence on Chinese rare-earth exports leaves its defense, renewable energy, and high-tech sectors vulnerable to sudden disruptions. In response, New Delhi is reviving domestic mining, forging new international partnerships, and investing in recycling and processing technologies—but experts say the road to self-sufficiency remains steep.
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What Happened: India’s Rare-Earth Rush
India’s Ministry of Mines has identified significant rare-earth deposits in Odisha, Andhra Pradesh, and Tamil Nadu, with preliminary estimates suggesting the country holds the world’s fifth-largest reserves. However, commercial extraction has lagged due to regulatory hurdles, environmental concerns, and a lack of domestic refining capacity.
To accelerate progress, the government has taken several steps in recent months:
1. Domestic Mining Revival – The state-owned Indian Rare Earths Limited (IREL) has been tasked with expanding exploration and extraction, particularly in the beach sands of Kerala and Tamil Nadu, which contain monazite—a key source of rare-earth elements. In 2025, the Ministry of Mines fast-tracked environmental clearances for new projects, though land acquisition disputes remain a bottleneck.
2. International Partnerships – India has deepened collaborations with Australia, the U.S., and Japan to diversify supply chains. Under the Quad’s Critical and Emerging Technology Working Group, the four nations are exploring joint ventures in rare-earth processing and stockpiling. Australia, which holds the world’s sixth-largest rare-earth reserves, has emerged as a key partner, with Indian firms investing in Australian mining projects.
3. Recycling and Substitution – The government has launched initiatives to recover rare-earth elements from electronic waste and industrial byproducts. The Ministry of Electronics and Information Technology (MeitY) has funded research into alternative materials for permanent magnets, a critical component in electric vehicles and wind turbines.
4. Policy Reforms – In 2026, India introduced the Critical Minerals Mission, a multi-agency effort to streamline mining approvals, incentivize private investment, and develop domestic refining capabilities. The mission also includes a National Rare Earths Policy, which aims to reduce import dependence from 90% to 50% within a decade.
Despite these efforts, India’s rare-earth sector remains in its infancy. Unlike China, which has spent decades consolidating its industry—often at the expense of environmental and labor standards—India lacks the infrastructure, technical expertise, and capital to quickly scale production.
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Why It Matters: The Geopolitics of Rare Earths
Rare-earth minerals—17 elements with exotic names like neodymium, dysprosium, and terbium—are essential to modern technology. They are used in:
– Defense: Missile guidance systems, radar, and stealth technology.
– Clean Energy: Wind turbines, electric vehicle motors, and solar panels.
– Consumer Electronics: Smartphones, laptops, and 5G infrastructure.
– Industrial Applications: Catalytic converters, medical imaging, and precision manufacturing.
China’s dominance in this sector gives it outsized influence over global supply chains. In 2010, Beijing temporarily halted rare-earth exports to Japan during a territorial dispute, sending shockwaves through global markets. More recently, China has imposed export controls on gallium and germanium—two critical minerals for semiconductors—raising alarms in Washington, Brussels, and New Delhi.
For India, the stakes are particularly high. The country’s defense modernization program, including the development of indigenous fighter jets, submarines, and missile systems, relies heavily on imported rare-earth components. Similarly, India’s ambitious renewable energy targets—500 gigawatts of non-fossil fuel capacity by 2030—depend on a steady supply of these minerals.
“China’s rare-earth strategy is not just about economics; it’s about coercive diplomacy,” said Dr. Rajiv Kumar, a former vice-chairman of NITI Aayog and author of the ORF report. “India cannot afford to be at the mercy of a single supplier, especially one that has shown a willingness to weaponize trade.”
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Background and Context: How China Built Its Rare-Earth Empire
China’s near-monopoly over rare-earth production is the result of decades of state-led industrial policy. In the 1980s and 1990s, Beijing subsidized domestic mining and processing, driving down global prices and forcing competitors—including the U.S., which once led the industry—out of the market. By the early 2000s, China controlled over 90% of global production.
Key factors behind China’s dominance:
– State Subsidies: The Chinese government provided tax breaks, cheap loans, and infrastructure support to rare-earth producers, enabling them to undercut foreign competitors.
– Environmental Arbitrage: Rare-earth mining and processing are highly polluting, involving toxic chemicals and radioactive byproducts. While Western nations imposed strict environmental regulations, China allowed unchecked expansion, often at the cost of local communities.
– Vertical Integration: China not only mines rare earths but also dominates refining, magnet production, and end-use manufacturing. This gives it control over the entire supply chain.
– Strategic Stockpiling: Beijing has built up massive stockpiles of rare-earth oxides, allowing it to manipulate global prices and supply during geopolitical tensions.
India’s rare-earth industry, by contrast, has been hamstrung by:
– Regulatory Delays: Environmental clearances and land acquisition disputes have stalled mining projects for years.
– Technological Gaps: India lacks the advanced processing facilities needed to convert raw ores into high-purity oxides and metals.
– Limited Private Investment: Unlike China, where state-owned enterprises dominate, India’s private sector has been reluctant to invest in rare-earth projects due to high capital costs and uncertain returns.
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Competing Claims and Uncertainty: Can India Catch Up?
India’s push for rare-earth self-sufficiency faces skepticism from some analysts, who argue that the country’s ambitions outstrip its current capabilities.
The Optimistic View:
Proponents of India’s strategy point to recent progress:
– Australia’s Role: Indian firms have invested in Australian rare-earth projects, including a joint venture with Lynas Rare Earths, the world’s largest non-Chinese producer. In 2025, India and Australia signed a Critical Minerals Partnership, aiming to co-develop processing facilities.
– Quad Collaboration: The U.S. and Japan have pledged technical and financial support to help India build refining capacity. The Quad’s Critical Minerals Mapping Initiative is identifying alternative supply chains in the Indo-Pacific.
– Domestic Potential: India’s rare-earth reserves, though underdeveloped, are substantial. The Atomic Minerals Directorate for Exploration and Research (AMD) has identified new deposits in Jharkhand and Rajasthan, which could reduce import dependence.
The Skeptical View:
Critics argue that India’s efforts are too little, too late:
– China’s Head Start: Even with international support, India will struggle to match China’s scale and efficiency. “China didn’t achieve its dominance overnight,” said Amit Bhandari, a fellow at the Gateway House think tank. “It took 30 years of state-backed investment. India is starting from scratch.”
– Environmental Concerns: Rare-earth mining is environmentally destructive, and India’s regulatory framework—while improving—remains inconsistent. Protests from local communities have already delayed projects in Odisha and Tamil Nadu.
– Economic Viability: Rare-earth prices are volatile, and India’s high production costs could make domestic output uncompetitive. Without subsidies or tariffs, Indian producers may struggle to compete with Chinese exports.
– Geopolitical Risks: Even if India diversifies its supply chains, China could retaliate by restricting exports of other critical components, such as semiconductors or pharmaceutical ingredients.
Unanswered Questions:
– Will India’s regulatory reforms be enough? The Critical Minerals Mission aims to fast-track approvals, but bureaucratic inertia and state-level resistance could slow progress.
– Can India attract private investment? Rare-earth projects require billions in upfront capital, and India’s private sector has historically preferred less risky ventures.
– Will international partnerships deliver? The Quad’s collaboration is promising, but geopolitical tensions—such as U.S.-China trade wars—could disrupt supply chains.
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What to Watch Next: Key Developments in 2026 and Beyond
1. The Critical Minerals Mission’s First Milestones – By the end of 2026, the government aims to award mining leases for at least three major rare-earth projects. Success will depend on whether environmental clearances and land acquisition disputes can be resolved quickly.
2. India-Australia Joint Ventures – The partnership with Lynas Rare Earths is expected to yield its first processed rare-earth oxides by 2027. If successful, it could serve as a model for future collaborations.
3. China’s Next Move – Beijing has not yet imposed rare-earth export controls on India, but analysts warn that escalating tensions—over border disputes or India’s alignment with the U.S.—could trigger retaliatory measures.
4. Private Sector Participation – The government is offering tax incentives and production-linked subsidies to attract private players. Whether companies like Tata Group or Reliance Industries enter the sector will be a critical test.
5. Technological Breakthroughs – India’s Defence Research and Development Organisation (DRDO) and Indian Institutes of Technology (IITs) are researching alternative materials for rare-earth magnets. A breakthrough could reduce dependence on imports.
6. Global Supply Chain Shifts – The U.S. and EU are also racing to reduce reliance on China, creating opportunities for India to position itself as an alternative supplier. However, competition from Vietnam, Myanmar, and Brazil could limit India’s market share.
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Conclusion: A Long Road to Strategic Autonomy
India’s push for rare-earth self-sufficiency is a high-stakes gamble—one that could redefine its economic and strategic future. While the country has made progress in diversifying supply chains and reviving domestic mining, it remains far behind China in scale, technology, and infrastructure.
The ORF report concludes that India’s best path forward lies in a hybrid approach: leveraging international partnerships to bridge immediate gaps while investing in domestic capacity for long-term resilience. However, success will require sustained political will, regulatory reform, and private-sector engagement.
For now, India’s rare-earth ambitions remain a work in progress—one that will test its ability to navigate the complex interplay of geopolitics, economics, and environmental sustainability. As China tightens its grip on global supply chains, the world will be watching to see whether India can break free from the chokepoint.
Story synopsis gathered from: [Observer Research Foundation](https://www.orfonline.org) — source.
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Story synopsis gathered from: Google News India Politics — source.
