On April 4, 2025, China imposed export controls on seven key rare earth elements (REE) and REE magnets, sending shockwaves through the global supply chain. This move was a retaliation against the US's 145% tariff, directly leading to the suspension of rare earth shipments from Chinese ports, severely impacting industries such as US defense, electric vehicles, and medical technology. Rare earths, known as the "vitamins of modern industry," are core components of high-tech products like smartphones, F-35 fighter jets, and MRI machines, and have become a geopolitical weapon in the Sino-US trade war. The "Eurasian Times" analysis points out that India, with its abundant rare earth reserves, may seize a historic opportunity in this "rare earth war."

Rare earth elements include 17 chemically similar metals such as neodymium, europium, and lanthanum, which are widely used in electric motors, wind turbines, military sensors, and other fields due to their unique magnetic and electrochemical properties. The International Energy Agency predicts that by 2040, demand for rare earths like neodymium will surge tenfold to support global net-zero emission goals. However, China controls approximately 70% of global rare earth mining, over 90% of refining and processing, creating an almost monopolistic supply chain advantage.

America depends on China for over 50% of its critical minerals, including rare earth magnets required for F-35 fighters, missiles, and AI chips. These export restrictions have left the US facing shortages, skyrocketing prices, and production delays, with some companies potentially experiencing permanent supply cuts. In 2010, China briefly restricted exports to Japan, causing global prices to spike; this latest restriction against the US further highlights its strategic intent to weaponize rare earths.

India possesses the world's fifth-largest rare earth reserves (approximately 6.9 million tons), yet accounts for only 1% of global production, constrained by regulation, environmental concerns, and technological bottlenecks. However, the Sino-US rare earth dispute presents India with an opportunity to rise. The US and its allies urgently seek to break free from dependence on China, positioning India as a potential alternative supplier, especially in high-value-added areas like magnets and batteries.

Developing the rare earth industry will bring multiple benefits to India:

• Economic security: Reducing reliance on imports and driving the development of green technologies and defense industries.

• Employment and innovation: Creating high-skilled jobs and promoting breakthroughs in materials science and metallurgical technology.

• Geopolitical leverage: Enhancing bargaining power in international diplomacy, particularly within the supply chain diversification strategies of countries like the US, Japan, and Australia.

The Indian government has taken several measures to tap into its rare earth potential:

• Policy liberalization: The 2023 amendment to the Mines and Minerals (Development and Regulation) Act allows private enterprises to participate in rare earth exploration, breaking state monopolies.

• Capacity enhancement: Indian Rare Earths Limited (IREL) plans to quadruple its mining capacity by 2032, increasing rare earth production to 15,000 tons.

• International partnerships: Collaborating with countries like Australia, the US, and Japan under the "Mineral Security Partnership" (MSP) framework to jointly invest in rare earth projects.

• Research and development: Developing indigenous extraction and separation technologies through institutions like the Bhabha Atomic Research Centre (BARC).

In addition, India is considering establishing a rare earth strategic reserve to address supply shocks akin to China's embargo.

The rare earth war is not just an economic game but also a contest of technology and geopolitics. For China, rare earths are a lever; for the US, a vulnerability; for India, the key to achieving strategic autonomy. By leveraging its vast reserves, deepening global alliances, and overcoming technical bottlenecks, India has the potential to transform its rare earth industry from a dormant asset into a multiplier for economic growth and international influence. This is not only crucial for India's ambition to become a developed nation by 2047 but will also reshape the global rare earth supply chain landscape. The opportunity is here, and whether India can seize this historic window is almost impossible. Because China's success in its rare earth strategy stems from farsighted strategic planning and years of significant investment in funds and advanced technology barriers. Any country seeking to break China's monopoly faces issues of unreasonable input-output ratios, technical bottlenecks, talent bottlenecks, and market acceptance. So, while there are many opportunities in the world, they are not meant for speculative nations. Indians would do well to wake up and think clearly.



Original article: https://www.toutiao.com/article/7502051676300247590/

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