India Seizes Opportunities in Global Critical Minerals Race

Prime Minister Narendra Modi recently completed a significant five-nation tour across Africa and the Americas from July 2 to July 9, 2023. This visit was strategically aimed at enhancing India’s position in the global critical minerals sector. The focus on establishing mutually beneficial partnerships for the exploration and exploitation of rare earth elements has gained momentum, particularly in the context of geopolitical and geoeconomic shifts. Countries visited included Ghana, Trinidad and Tobago, Argentina, Brazil, and Namibia, where India has been actively pursuing strategic partnerships to secure vital mineral resources.

India’s public sector undertaking, KABIL (Khanij Bidesh India Limited), has already secured contracts in Argentina. Additionally, the National Mineral Development Commission (NMDC) is actively engaged in various initiatives across Africa. India has been negotiating with the countries within the lithium triangle—Argentina, Chile, and Bolivia—to acquire mining concessions for lithium and other critical minerals essential for green technologies and advanced manufacturing, as stated by MEA Secretary Kumaran.

India’s Strategic Shift in Mineral Geopolitics

The demand for critical minerals has surged in the 21st century, where they have become essential for technological advancement. From electric vehicles to military applications, these minerals are vital for modern innovation. Currently, the global supply chain is heavily reliant on China, which dominates the processing and manufacturing of rare earth elements. This monopoly has allowed China to leverage its dominance strategically, often using it as a tool in international relations.

China’s historical success in the rare earth sector stems from decades of industrial planning, substantial government subsidies, and a willingness to overlook environmental concerns associated with extraction and processing. The Bayan Obo mine in Inner Mongolia stands as a testament to this success, creating a self-sustaining supply chain. By consolidating producers into state-owned enterprises and adopting liberal trade policies, China has managed to exert significant control over pricing and availability. This became evident during China’s 2010 embargo on Japan and its recent restrictions on heavy rare earths in April 2025, which underscored the global risks associated with a centralized mineral supply chain.

In response to these challenges, countries like the United States are ramping up domestic production and forming partnerships with allies such as Canada and Australia to diversify their supply chains. Japan has also taken steps to reduce its reliance on Chinese minerals by supporting Australian companies like Lynas Corporation. Meanwhile, the European Union is exploring alternative sources and enhancing recycling efforts. Despite these initiatives, the complexity and costs associated with processing rare earths continue to pose significant obstacles.

India’s Emerging Role in the Global Minerals Landscape

India’s potential in this global shift is increasingly urgent. With the world’s third-largest reserves of rare earth elements, the country is awakening a sector that has long been underutilized. The National Critical Mineral Mission (NCMM), launched in 2025, aims to undertake over a thousand exploration projects by 2030, fostering innovation in mineral recovery. Regulatory changes and fast-tracked permitting processes are designed to attract private investment and expertise, marking a significant shift in India’s mineral policy.

A key player in this transformation is IREL (India) Ltd, which has expanded its operations from raw material extraction to the production of advanced materials like magnets. With facilities in Visakhapatnam and Bhopal, IREL is now supplying products for aerospace and defence applications while exploring potential deposits in countries like Oman and Sri Lanka to diversify its supply base.

International partnerships play a crucial role in bolstering India’s mineral strategy. The India-Australia Critical Minerals Investment Partnership facilitates joint ventures and research and development initiatives, while cooperation agreements with Ghana and Brazil enhance India’s global reach. Additionally, India has established bilateral agreements for supply diversification, including a significant deal with Kazakhstan for rare earths and critical metals. Participation in international forums such as the Quad and the Minerals Security Partnership positions India alongside democratic nations aiming to counter China’s influence in the mineral sector.

Despite these advancements, challenges remain. The Atomic Energy Act of 1962 classifies monazite as a restricted substance due to its thorium content, which discourages private mining ventures. Furthermore, India’s domestic infrastructure for refining and magnet manufacturing is still in its developmental stages, and environmental issues related to radiation and waste management require careful oversight. The volatile nature of mineral markets also adds uncertainty to India’s ambitious plans.

India is currently finalizing a ₹5,000 crore Production-Linked Incentive (PLI) scheme aimed at boosting domestic magnet manufacturing. Interest from companies such as Mahindra & Mahindra and Sona Comstar reflects growing confidence in the sector’s potential. Additionally, urban mining and e-waste recycling are emerging as sustainable practices that align with circular economy principles, reducing the environmental burden associated with raw material extraction.

India’s transition from passive dependence on mineral imports to a more self-sufficient and strategic approach is underway. The shift has sparked global discussions about alternatives to China’s dominance, highlighting India’s role as a serious contender in the critical minerals landscape.

As India navigates this intricate geopolitical landscape, its commitment to reform, innovation, and international collaboration could redefine global supply chains. The current moment presents an opportunity for India to transform challenges into prospects for leadership in the minerals sector. By investing in domestic capacity, fostering resilient partnerships, and embracing innovative practices, India can move beyond simply reacting to China’s actions and establish itself as a key player in shaping a more balanced mineral order.

In conclusion, China’s rare earth monopoly poses significant challenges but also serves as a catalyst for change. For India, this is not just a question of supply chains; it represents a crucial geopolitical moment. As the country enhances its mineral wealth, reforms its policies, and strengthens international ties, it is poised to alter global dependencies and create a more secure future in the minerals race. The path ahead may be complex, but the potential for India to emerge as a leader in this vital sector is clearer than ever.