Batteries, EVs under threat? India fires on all cylinders for rare earths amid China

While the US, Europe, and Japan scramble to find alternative supply lines, India sees an opening — and it’s moving to capitalise.

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As China tightens its stranglehold on the global supply of rare earth elements, India is shifting gears — fast. From forging new partnerships in Central Asia to finalising an ambitious incentive scheme for mineral recycling, India is pushing ahead to secure its place in the global race for critical minerals.At the recently held India-Central Asia Dialogue in New Delhi, India and five Central Asian nations expressed mutual interest in jointly exploring rare earths and other critical minerals. In a joint statement, they called for an early meeting of the India-Central Asia Rare Earth Forum, signalling growing geopolitical urgency to diversify away from China’s near-monopoly.

China’s chokehold spurs urgency

The backdrop to these moves is no coincidence. Over the past year, China has weaponised its control over rare earths, placing several critical minerals and magnets under strict export licence regimes. These are the very components vital for electric vehicles, wind turbines, semiconductors, and even military-grade systems. Beijing’s message is clear: if the West can play export control hardball, China has its own scalpel and it’s now using it with surgical precision.While the US, Europe, and Japan scramble to find alternative supply lines, India sees an opening — and it’s moving to capitalise.

From mission to momentum

Under the Rs 34,300 crore National Critical Mineral Mission (NCMM), India aims to become self-reliant in sourcing and processing critical minerals like lithium, cobalt, nickel, and rare earth elements. Joint Secretary in the Mines Ministry, Dinesh Mahur, announced that an incentive scheme for recycling these minerals is in its final stages. The Union Budget has already earmarked Rs 1,500 crore specifically for this effort.Public Sector Enterprises are expected to contribute Rs 18,000 crore to the mission. With a sharp focus on domestic exploration, overseas block acquisition, and technological R&D, the NCMM is India’s boldest bet yet to insulate its industries from global supply shocks.

Auto industry feels the heat

The urgency is not just strategic — it’s also economic. Rare earth shortages are already casting a shadow over India’s auto sector, especially electric vehicles (EVs), which depend on permanent magnets for motors. Bajaj Auto has warned that its e-scooter production could be impacted from July if Chinese export delays continue. TVS Motor has echoed similar concerns.According to the Federation of Automobile Dealers Associations (FADA), only a third of its members expect sales growth in June. The rare earth crunch, combined with high inventories and tight financing, has pushed automakers to brace for a cautious month — especially as the EV rollout faces headwinds.

China’s long game, India’s fast track

What China is doing today has been decades in the making. The world first saw signs of Beijing’s ambitions in 2010 when it temporarily banned rare earth exports to Japan over a territorial spat. By 2020, China had passed its own Export Control Law, giving it sweeping powers to curb exports of materials deemed vital to national security. The law was broad enough to include critical minerals, tech, and even data.

Now, with the US-China trade war escalating, rare earths have become Beijing’s leverage. Export licenses have slowed, production lines in Europe have paused, and Washington is on edge. China’s near-monopoly on processing and refining rare earths — not just mining them — means that even if other countries dig up the ores, they’ll still need China to process them.

Which is why India’s current push isn’t just policy — it’s necessity.

The Road Ahead

While China refines 90% of the world’s rare earths, India is still building capacity. But the groundwork is being laid — with diplomatic ties, budgetary commitments, and strategic focus.

The success of the NCMM could determine whether India emerges as a resilient alternative or remains vulnerable to future supply shocks. With global demand for EVs, semiconductors, and green energy tech rising, the stakes couldn’t be higher.

In this global battle for minerals that power the future, India is no longer on the sidelines. It’s suiting up — and firing on all cylinders.

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