Critical Blockage: Rare Earth Export Restrictions by China
(Source: The Indian Express, Editorial Page)
Also Read: The Indian Express Editorial Analysis: 24 June 2025
Also Read: The Hindu Editorial Analysis: 24 June 2025
| Topic: GS3 – Economy; GS3 – Science & Technology; GS2 – International Relations |
| Context |
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China’s Monopoly on Rare Earths
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China controls over 60% of global rare earth production and nearly 85% of refining capacity.
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Rare earth elements (REEs) like neodymium, lanthanum, and dysprosium are essential for electronics, EVs, green energy, and defense systems.
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China’s export restrictions are not new but now seem more geopolitically motivated, especially amid worsening ties with Western economies and trade realignments.
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The move allows China to weaponize its mineral control, much like oil diplomacy during the Cold War era.
India’s Strategic Vulnerability
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India is critically dependent on China for REEs used in EV batteries, smartphones, and missile guidance systems.
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India has moderate reserves of rare earths, especially in states like Andhra Pradesh, Odisha, and Kerala, but lacks processing infrastructure.
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IREL (India) Limited, the key PSU responsible for rare earth exploration, suffers from underfunding and bureaucratic delays.
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India’s 2023 draft policy on critical minerals remains non-binding and lacks enforcement mechanisms, leaving gaps in long-term preparedness.
Policy Responses and Strategic Pathways
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National Rare Earth Mission: Similar to the semiconductor mission, a focused scheme is needed for mining, refining, and innovation.
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Quad Collaboration: Tapping into partnerships with Australia and the U.S. (which have reserves and technologies) can help build resilient supply chains.
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Incentivizing Private Sector: Allowing FDI, easing mining norms, and offering tax incentives can mobilize domestic capacity.
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Environmental Safeguards: Extraction and processing must not ignore ecological costs—learning from China’s environmental degradation is crucial.
Rare Earth Dependence and Policy Landscape
| Factor | China | India |
|---|---|---|
| Share in Global REE Production | 60–62% | <2% |
| Processing Infrastructure | Advanced and State-funded | Limited and PSU-dependent |
| Strategic Policy | Aggressive export controls | Draft critical mineral strategy |
| Global Partnerships | Belt & Road alignment | Quad, Indo-Pacific cooperation |
| Environmental Impact | High (not eco-compliant) | Yet to scale, needs ESG focus |
Conclusion & Way Forward
- India must adopt a comprehensive critical minerals policy, centered around strategic autonomy, technological innovation, and sustainability.
- Public-private collaboration, global partnerships, and strong institutional backing will be essential to ensure resilience in future supply chains.
- Just as India moved ahead in semiconductors, it now needs to prioritize rare earth security with equal urgency.
| Practice Question: (GS-3 | 15 Marks | 250 Words) How does China’s control over rare earth elements impact India’s strategic and economic interests? Suggest policy measures to enhance India’s self-reliance in rare earth supply chains. |
