How India is challenging China’s chokehold on critical minerals

Prime Minister Narendra Modi’s recent five-nation tour to Africa and the Americas (July 2-9) was strategic to the core from a geopolitical to geoeconomic context to acquire the geotechnological heft. Mutually beneficial collaboration in exploring and exploiting the rare earths and critical minerals and the quest for strategic partnerships in this regard have been crucial for India for quite some time now, be it the Quad partnership or the cooperative arrangements finalised during the visit to Ghana, Trinidad & Tobago, Argentina, Brazil, or, for that matter, Namibia.

India’s Public Sector Undertaking KABIL has already secured some contracts in Argentina. Likewise, the National Mineral Development Commission (NMDC) is active in Africa. India was in talks with all three countries of the `lithium triangle’, which comprises Argentina, Chile, and Bolivia. “We’re also talking to Peru and Bolivia to try and acquire mining concessions that hold lithium, molybdenum, and other critical minerals that are useful for our green transition and for advanced manufacturing,” as mentioned by MEA Secretary Kumaran. The 21st century dictates excellence in critical minerals and technologies as crucial to growth.

In today’s high-stakes race for technological supremacy, rare earth elements and critical minerals have emerged as the silent currency of power. From electric vehicles to missile systems, these minerals fuel the engines of modern innovation, and the global supply chain is dangerously lopsided. China, with its near-monopoly on processing and magnet manufacturing, has weaponised its dominance, turning minerals into leverage.

But the tide is shifting. India, fortunately armed with the world’s third-largest rare earth reserves and a renewed strategic vision, is stepping into the arena with purpose. Through bold reforms, international partnerships with countries like Australia and Brazil, and a ₹5,000 crore push for domestic production, New Delhi is not just reacting to Beijing’s chokehold—it’s rewriting the rules of mineral geopolitics. India is linking mineral security to national security to regain its geopolitical power.

China’s dominance in the rare earth sector comes from decades of careful industrial planning, substantial subsidies, and a willingness to overlook the environmental damage from extraction and refining. The Bayan Obo mine in Inner Mongolia illustrates this success, supporting a supply chain that includes mining, processing, and manufacturing. By consolidating producers into state-owned enterprises and adopting liberal trade policies, China has gained considerable control over the pricing and availability of key materials, using rare earths as strategic tools in global diplomacy.

This became clear during China’s 2010 embargo on Japan and again in April 2025 when it restricted exports of heavy rare earths like dysprosium, terbium, and samarium. These minerals are vital for high-performance magnets in defence and green technologies. The resulting disruption forced manufacturers and governments worldwide to quickly diversify their sources, highlighting the risks of an overly centralised mineral supply chain. This isn’t merely protectionism; it’s a covert form of economic warfare.

In reaction to this imbalance, several countries are exploring alternative strategies. The United States has restarted domestic production and partnered with allies like Canada and Australia. Japan has reduced its reliance by supporting Lynas Corporation, an Australian rare earth mining and processing company. Meanwhile, the EU is focusing on sourcing alternatives and recycling. However, rare earths remain challenging and expensive to process, and establishing reliable supply chains outside China requires ongoing global coordination. Despite the alarm bells, the global response remains sluggish. Additionally, none of these projects will mature fast enough to offset the short-term supply crunch or break the monopoly.

India’s role in this shift is both urgent and hopeful. With significant reserves found in monazite-rich coastal sands across five states, India is awakening a largely dormant sector. Previously held back by regulations and limited private involvement, the country is now changing its policies. The National Critical Mineral Mission (NCMM), launched in 2025, plans over a thousand exploration projects by 2030 and promotes innovations in mineral recovery. Fast-track permitting and regulatory changes are designed to attract private investment and expertise.

A key player in India’s strategy is IREL (India) Ltd, a public sector company that has expanded from raw material extraction to magnet production. Its facilities in Visakhapatnam and Bhopal are now supplying products for testing in aerospace and defence sectors. At the same time, IREL is exploring potential deposits in countries like Oman and Sri Lanka, showing a proactive effort to diversify supply.

International partnerships are further bolstering India’s efforts. The India-Australia Critical Minerals Investment Partnership facilitates joint ventures and R&D, while cooperation agreements with Ghana and Brazil broaden India’s global reach. India has also signed bilateral pacts for supply diversification, including a major deal with Kazakhstan for rare earths and critical metals. Participation in international forums such as the Quad and Minerals Security Partnership aligns India with democratic nations working to counter China’s mineral influence. China’s actions in Myanmar are a clear warning that the battle for minerals is the new great power contest. India needs to be on its haunches, as the race has entered its neighbourhood.

Some significant challenges remain. The Atomic Energy Act of 1962 classifies monazite as a restricted substance due to its thorium content, discouraging private mining. Additionally, India’s domestic infrastructure for refining and magnet manufacturing is still developing. Environmental issues, particularly related to radiation and waste, must be managed with strong safeguards. The volatility of mineral markets adds another layer of uncertainty. But this time, the world has choices. India is emerging as one of the most serious contenders to provide an alternative. Its geological endowment, growing industrial base, and assertive diplomacy make it a credible challenger to Beijing’s monopoly. India’s future looks bright in the sector, but catching up with China’s momentum is not going to be smooth sailing.

To address these dilemmas, India is finalising a ₹5,000 crore Production-Linked Incentive (PLI) scheme aimed at boosting domestic magnet manufacturing. Interest from companies like Mahindra & Mahindra and Sona Comstar indicates growing confidence in the sector’s future. Moreover, urban mining and e-waste recycling are emerging as sustainable options that align with circular economy principles and lessen the burden of raw material extraction.

India’s shift from passive dependence to strategic independence is underway. China’s grip, once thought to be unbreakable, has unintentionally sparked global resistance and innovation. India’s approach, based on foresight, reform, and partnerships, is developing a new narrative in mineral geopolitics. If India can successfully increase its refining capacity, simplify regulation, and encourage innovation, it can move beyond simply following China and establish its leadership.

In conclusion, China’s rare earth monopoly poses both a formidable challenge and a much-needed call for change. For India, this moment calls for ambition, collaboration, and resilience. With its mineral wealth, commitment to reform, and international partnerships, India is well-positioned to alter global dependencies and create a more balanced supply chain for the future. The road ahead is complex, but the opportunity for leadership in the minerals race is clearer than ever.

China’s mineral dominance may have sparked disruption, but it has also ignited a global awakening. For India, this is more than a supply chain challenge. It’s a geopolitical inflection point. By investing in domestic capacity, forging resilient partnerships, and embracing innovation, India is transforming vulnerability into opportunity. The path ahead demands grit and coordination, but the destination is clear: a future where mineral security underpins national strength. In the unfolding narrative of global power, time is critical, and hence India is no longer a spectator but is positioning itself as a decisive force in shaping a more balanced and secure mineral order.

Anil Trigunayat is a Distinguished Fellow at Vivekananda International Foundation and Vedika Znwar is a researcher in international relations and geo-politics. The views expressed in the above piece are personal and solely those of the authors. They do not necessarily reflect Firstpost’s views.