'India can play key role in breaking China's near-monopoly on critical minerals'

New Delhi, March 22 (IANS) India, which holds the world's fifth largest rare earth reserves and the required technology to produce these minerals, can play a crucial role in breaking China’s near-monopoly on these critical minerals required for making electric vehicles, wind turbines, hi-tech electronic goods and defence equipment, according to an article.

The global race for rare earth elements (REEs) has shifted from the margins of industrial policy to the centre of geopolitics. China currently accounts for roughly 90 per cent of rare earth separation and processing, and 93 per cent of magnet manufacturing, according to an article published by the Australian Institute of International Affairs.

This near monopoly has enabled China to use rare earth exports as a strategic leverage. The most cited examples include the 2010 and January 2026 restrictions on shipments to Japan during maritime disputes in the East China Sea, as well as more recent export controls used in negotiations with the United States. As geopolitical tensions deepen, governments and industries are urgently seeking alternative sources of supply, the article by Dalbir Ahlawat pointed out.

India also remains heavily dependent on China for 80-90 per cent of its magnets and related materials. This vulnerability became clear when China tightened exports during a trade dispute, resuming supply only after India provided end-user guarantees that the materials would not be re-exported to the United States, the article states.

Despite its sizeable reserves, India’s rare earth sector has long been underdeveloped. Production has been limited and dominated by state-owned enterprises such as Indian Rare Earths Limited, whose regulatory framework historically discouraged private investment. This, in turn, constrained refining capacity and prevented India from fully capitalising on its resource base.

To adapt to ground realities, India launched the National Critical Minerals Mission in January 2025 to expand domestic exploration, processing, and value addition. The government has begun opening critical mineral exploration to private firms while strengthening cooperation with international partners through frameworks such as the Minerals Security Partnership (MSP), which includes the United States, Japan, Australia, and several European countries.

Within South Asia, India occupies a distinctive geostrategic position that is increasingly shaped by competing connectivity initiatives. China’s Belt and Road Initiative continue to expand infrastructure and economic linkages, while the US-led Indo-Pacific frameworks seek to build alternative supply chains. In a sense, infrastructure investments, energy corridors, and connectivity projects have become a hallmark of strategic competition in South Asia and the Indian Ocean region. Rare earth resources are increasingly becoming part of broader strategic competition, linking resource security with infrastructure development and regional influence, the article observed.

India’s regional initiatives, beginning with the Security and Growth for All in the Region (SAGAR) doctrine and recently expanded into the Mutual and Holistic Advancement for Security and Growth Across Regions (MAHASAGAR), reflect a cooperative approach to regional development. These frameworks emphasise maritime cooperation, disaster relief, sustainable development, and economic connectivity across the Indian Ocean and South Asia. Integrating rare earth supply chains into this framework could open new avenues for collaboration with several regional states possessing deposits of critical minerals: Afghanistan (lanthanum, cerium, neodymium), Bangladesh (monazite, zircon), Myanmar (dysprosium, terbium), Nepal (tantalum, niobium), Bhutan (tungsten, lithium), and Sri Lanka (monazite, zircon). Yet these resources remain largely unexploited due to technological, regulatory, and financial constraints, the article stated.

India’s combination of resource availability, technological capacity, and geopolitical positioning uniquely positions it to lead the development of regional value chains for rare earth extraction and processing. By doing so, New Delhi could enable South Asian states to participate more actively in global supply networks while reducing excessive reliance on external powers, the article pointed out.

India has also expanded international cooperation through the MSP framework, complementing broader efforts by partners such as Australia’s Lynas Corporation, the United States’ Mountain Pass mine, Japan’s diversification through overseas partnerships and recycling technologies, and the European Union’s Critical Raw Materials Act.

By strengthening domestic capacity, partnering with international producers, and fostering regional cooperation across South Asia, New Delhi can reinforce its broader role as a stabilising force in the region, the article added.

--IANS

sps/vd