Rare Earths: India's Opportunity to Strengthen Regional Supply Chains

India’s Rare Earth Potential Gains Strategic Focus Amid Global Supply Chain Shifts​

New Delhi, March 22: India is emerging as a potential counterweight in the global rare earth supply chain, leveraging its vast reserves and technological capabilities at a time when geopolitical tensions are reshaping access to critical minerals.

China’s Dominance Drives Global Urgency​

The global race for rare earth elements has moved to the forefront of geopolitical strategy. China currently dominates the sector, accounting for nearly 90 percent of rare earth separation and processing, along with 93 percent of global magnet manufacturing, according to an article published by the Australian Institute of International Affairs.

This concentration of control has allowed Beijing to deploy rare earth exports as a strategic lever. Past instances include restrictions on shipments to Japan during maritime disputes in 2010 and January 2026, as well as export controls used in negotiations with the United States. As a result, countries and industries are actively seeking diversified and secure supply sources.

India’s Strategic Position and Dependency Challenges​

India holds the world’s fifth-largest reserves of rare earth elements and possesses the technology required to process them. Despite this, the country remains significantly dependent on China for 80 to 90 percent of its magnets and related materials.

This reliance became evident during a recent trade dispute when China tightened exports, resuming supplies only after India provided assurances that the materials would not be re-exported to the United States.

Structural Gaps in Domestic Development​

India’s rare earth sector has historically remained underdeveloped. Production has been limited and largely controlled by state-owned entities such as Indian Rare Earths Limited. Regulatory constraints have discouraged private sector participation, limiting investment in refining capacity and slowing value chain development.

Policy Push to Strengthen Domestic Capabilities​

In response, the government launched the National Critical Minerals Mission in January 2025 to scale up exploration, processing, and value addition. The initiative includes opening mineral exploration to private players and expanding collaboration with international partners through platforms such as the Minerals Security Partnership, which includes the United States, Japan, Australia, and European countries.

Rare Earths Enter Regional Strategic Landscape​

Rare earth resources are increasingly tied to broader geopolitical and economic competition, particularly in South Asia and the Indian Ocean region. Competing initiatives such as China’s Belt and Road Initiative and US-led Indo-Pacific frameworks are shaping infrastructure and supply chain dynamics.

India’s regional doctrines, including Security and Growth for All in the Region and its expanded framework, Mutual and Holistic Advancement for Security and Growth Across Regions, emphasize cooperation in maritime security, disaster response, sustainable development, and economic connectivity.

Regional Resource Opportunities Remain Untapped​

Several South Asian countries possess rare earth and critical mineral deposits, including Afghanistan, Bangladesh, Myanmar, Nepal, Bhutan, and Sri Lanka. However, these resources remain largely underutilized due to technological, regulatory, and financial limitations.

Integrating rare earth supply chains into regional cooperation frameworks could unlock new opportunities for collaboration and strengthen economic linkages across the region.

Expanding Global Partnerships​

India is also aligning with global efforts to diversify rare earth supply chains. These include initiatives by Australia’s Lynas Corporation, the United States’ Mountain Pass mine, Japan’s overseas partnerships and recycling technologies, and the European Union’s Critical Raw Materials Act.

India’s Emerging Role in Global Supply Chains​

With a combination of resource availability, technical expertise, and strategic positioning, India is well placed to contribute to the development of regional and global rare earth value chains. Strengthening domestic capabilities while expanding international and regional partnerships could enhance supply security and reduce dependence on dominant players in the sector.