India Accelerates Mineral Diplomacy as Beijing Tightens Export Controls

China’s latest expansion of export restrictions on rare earths and advanced materials has injected new urgency into India’s efforts to secure the minerals that will power its clean-energy transition and defence modernisation. For New Delhi, the October 2025 clampdown is both a wake-up call and a strategic opportunity — forcing a structural rethink of how to insulate the economy from the weaponisation of resources central to the “new industrial age.” Beijing’s move extends its licensing regime on rare earth elements (REEs) to include downstream technologies such as magnets, semiconductors, and processing equipment. The new rules effectively treat any item with Chinese content or know-how as subject to export control — a sharp escalation that links minerals directly to strategic and defence concerns.

Requests tied to military end-use, including India’s defence sector, are automatically denied. Civilian applications face long processing times and intrusive scrutiny. With 76% of global refining capacity and control of 12 of the world’s 17 key rare earths, China retains a commanding grip over the supply chain that underpins green technology, batteries, and advanced manufacturing. For India, this raises the stakes across multiple fronts — from electric-vehicle manufacturing and wind-turbine production to precision electronics and defence technology. The ripple effects of Chinese export delays in 2023 and 2025 already slowed output and forced cost adjustments for Indian producers.

India’s Strategic Countermove: Building Resilience at Home

New Delhi’s response has shifted from reactive policy to systemic strategy. The government has approved the creation of a National Critical Mineral Stockpile (NCMS) — a buffer reserve designed to guarantee at least two months of supply for priority industries. The facility will initially focus on rare earths, expanding to lithium, cobalt, and nickel as the ecosystem develops. Private-sector participation is being encouraged to ensure scale and efficiency. Alongside the NCMS, the National Critical Minerals Mission (NCMM) has earmarked INR 73bn to promote rare-earth magnet production (targeting 6,000 tonnes over five years) and an additional INR 15bn for recycling capacity.

Domestically, exploration is accelerating: over 55 strategic mineral blocks have been auctioned, 34 awarded, and a new tranche launched this quarter. With 7.2 million tonnes of rare-earth oxide spread across 13 million tonnes of monazite deposits, India’s resource base is significant but under-developed. Technological gaps in refining and processing remain the largest obstacle to self-sufficiency.

Global Outreach: Securing Supply Beyond Borders

Recognising that domestic production alone cannot bridge the gap, India is deepening its footprint abroad. Negotiations are under way with Peru, Chile, and Argentina — home to some of the world’s largest lithium and copper reserves — to secure long-term supply contracts and direct equity stakes in mining projects.

Five Indian firms now operate in Peru’s mining sector, with $61 million in committed investments. At the multilateral level, India is leveraging the Quad Critical Minerals Initiative alongside the US, Japan, and Australia, focusing on project financing, R&D collaboration, and shared strategic stockpiles. Engagements in Africa and Australia aim to diversify sourcing and dilute China’s dominance.

Economic and Strategic Outlook

The tightening of China’s export regime exposes India’s dual vulnerability — to price shocks and to technological dependence — but also accelerates its emergence as an alternative node in global supply chains. Economically, the stockpiling and recycling push cushions manufacturers from short-term disruptions while aligning industrial policy with the green transition.

Over the next five years, India is likely to make partial but tangible progress. By 2030, the country could meet 35–40% of its domestic critical-mineral demand through local production, recycling, and allied Quad-linked supply chains — up from less than 10% today. Import dependence will persist for lithium and cobalt, but refining and magnet production capabilities should expand markedly as public and private investment accelerate. Fiscal pressures will rise in the near term, but the longer-term pay-off is strategic autonomy: a more diversified mineral portfolio, reduced exposure to Chinese pricing power, and a platform for technology-intensive manufacturing.

India will not achieve full mineral independence this decade — the technological and financial barriers remain high — but it is positioning itself as a credible alternative hub for processing and recycling within a fragmented global supply system. Success will depend less on the geology beneath its soil and more on its ability to integrate diplomacy, industrial policy, and innovation into a coherent critical-minerals strategy.