India Aims to Break China’s Rare Earth Chokehold

India is intensifying efforts to reduce its 80% reliance on China for critical minerals like lithium and rare earths, vital for electric vehicles (EVs), defense, and renewable energy, as outlined in a June 2025 Outlook Business report. The National Critical Mineral Mission, launched in 2025, targets domestic production to counter China’s export curbs, supporting India’s net-zero 2070 goal.

China controls 70% of global rare earth mining and 90% of refining, dominating supply chains for EV batteries, wind turbines, and defense systems. India’s 82% lithium import reliance and 42-85% dependency on six critical minerals, including bismuth and graphite, expose vulnerabilities, per a 2024 Hindu report. China’s April 2025 export restrictions on seven rare earths disrupted India’s EV sector, with 50% of 4,010-tonne demand in 2025 from EVs and wind turbines. The National Critical Mineral Mission, with Rs 5,000 crore ($600 million) allocated, aims to boost mining, processing, and magnet production, per Times of India.

Indian Rare Earths (IREL) is scaling up, targeting 5% of global REE production by 2030, up from 1%. India’s 35% share of global beach sand deposits, rich in neodymium and cerium, supports this goal, per EY. However, refining technology lags, with 80% of processing equipment imported, raising costs by 10%. The 2025 Budget’s $1 billion for critical minerals funds R&D and subsidies, but 20% project delays due to regulatory hurdles persist. Gujarat’s pilot rare earth plant, producing 100 tonnes annually, achieves 85% efficiency, offering a model.

Private sector participation, like Sona Comstar’s magnet manufacturing, reduces import reliance by 10%. The U.S.-India MoU on critical minerals, signed in October 2024, fosters joint processing in South America, targeting 500 tonnes by 2027. Challenges include high mining costs ($50,000/tonne) and environmental risks, with 5% ecosystem disruption. Posts on X highlight Vedanta’s $100 million investment in rare earths, reflecting industry momentum. Global benchmarks, like Australia’s 10% REE share, show diversified supply chains, but India needs $200 million in training for 10,000 workers by 2030.

Conclusion

India’s push for rare earth self-reliance counters China’s dominance, supporting EV and defense sectors. Scaling technology and addressing environmental concerns are critical for success.

Source: Outlook Business