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

China’s Monopoly on Rare Earths

• China controls over 60% of global rare earth production and nearly 85% of refining capacity.

• Rare earth elements (REEs) like neodymium, lanthanum, and dysprosium are essential for electronics, EVs, green energy, and defense systems.

• China’s export restrictions are not new but now seem more geopolitically motivated, especially amid worsening ties with Western economies and trade realignments.

• The move allows China to weaponize its mineral control, much like oil diplomacy during the Cold War era.

India’s Strategic Vulnerability

• India is critically dependent on China for REEs used in EV batteries, smartphones, and missile guidance systems.

• India has moderate reserves of rare earths, especially in states like Andhra Pradesh, Odisha, and Kerala, but lacks processing infrastructure.

• IREL (India) Limited, the key PSU responsible for rare earth exploration, suffers from underfunding and bureaucratic delays.

• 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

• National Rare Earth Mission: Similar to the semiconductor mission, a focused scheme is needed for mining, refining, and innovation.

• Quad Collaboration: Tapping into partnerships with Australia and the U.S. (which have reserves and technologies) can help build resilient supply chains.

• Incentivizing Private Sector: Allowing FDI, easing mining norms, and offering tax incentives can mobilize domestic capacity.

• Environmental Safeguards: Extraction and processing must not ignore ecological costs—learning from China’s environmental degradation is crucial.

Rare Earth Dependence and Policy Landscape

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.