India and the United States signed a bilateral framework on 26 May to secure the supply of critical minerals and rare earths during the Quad foreign ministers’ meeting in New Delhi. On the same day,
India, the US, Australia, and Japan unveiled the Quad Critical Minerals Initiative Framework, pledging to mobilise up to $20 billion in public and private investment for mining, processing, and recycling.
External Affairs Minister S Jaishankar emphasised that the framework would deepen cooperation across the entire supply chain, while US Secretary of State Marco Rubio warned against dependence on a single-source monopoly, clearly alluding to China.
The Geological Survey of India highlighted that critical minerals have transformed from industrial raw materials into strategic assets, underpinning clean energy, electric mobility, advanced electronics, and defence technologies.
India has been actively pursuing supply chain diversification. In January 2024, state-owned KABIL signed an agreement with Argentina’s CAMYEN SE for five lithium brine blocks, marking India’s first overseas lithium mining project. India also signed cooperation agreements with Japan and Australia, and most recently, engaged Myanmar on critical minerals and rare earths.
China’s dominance in this sector is overwhelming. It controls around 80% of global rare earth refining capacity and 91% of refined output, with a 94% share in permanent magnet production. Its strength lies not in raw ore but in processing, refining, and magnetic manufacturing.
Since 2023, China has imposed export restrictions on critical minerals and related technologies, exposing vulnerabilities in global supply chains. India’s dependence is stark, with China supplying between 59.6% and 81.3% of India’s permanent magnet imports by value and up to 90.4% by quantity between 2022 and 2025.
The Quad initiative offers India an opportunity to build resilience, but experts caution that India’s processing infrastructure is its weakest link. Current refining capacity is only 400–500 tonnes per annum of neodymium-praseodymium oxide, less than 25% of domestic demand.
Although the Union Cabinet approved a ₹7,280 crore scheme in 2025 to establish 6,000 metric tonnes per annum of integrated NdFeB magnet manufacturing capacity, commercial-scale production has yet to begin. Downstream industrial capabilities remain underdeveloped.
India’s rare earth resources, primarily monazite sands along its coastlines, pose regulatory challenges due to thorium and uranium content, classified as prescribed substances under the Atomic Energy Act.
This restricts private sector participation, leaving state-owned entities like IREL to dominate. Without industrial-scale conversion lines for alloy and magnet manufacturing, India’s ambitions remain aspirational.
To address these gaps, the National Critical Mineral Mission was launched in January 2025 with an outlay of ₹34,300 crore over seven years, covering exploration, mining, processing, recycling, and stockpiling.
Rare earth corridors have been introduced in Kerala, Tamil Nadu, Andhra Pradesh, and Odisha, while exploration is intensifying in Rajasthan, Gujarat, and Assam. The Geological Survey of India is integrating beneficiation and metallurgical studies into exploration to ensure better processing potential.
India holds an estimated 7 million tonnes of rare earth oxides, the fifth largest globally. However, experts argue that complete self-sufficiency is unattainable.
Instead, India aims for substantial strategic self-reliance, combining domestic capacity building with trusted international partnerships. Developing modular and integrated mining-processing units may be necessary given the small tonnage and limited footprints of deposits.
Timelines remain a challenge, as mineral discoveries can take over a decade to translate into production. The Quad’s $20 billion initiative will be judged by its ability to create long-term industrial capabilities and operational projects.
Analysts believe India’s most realistic path is not replacing China but building alongside it, becoming a major processing hub in its own right through sustained investment over the next decade.
Agencies
