{"id":38195,"date":"2026-03-18T11:46:31","date_gmt":"2026-03-18T00:46:31","guid":{"rendered":"https:\/\/www.internationalaffairs.org.au\/?post_type=australianoutlook&p=38195"},"modified":"2026-03-18T11:46:32","modified_gmt":"2026-03-18T00:46:32","slug":"critical-minerals-and-global-connectivity-indias-strategy-for-a-south-asian-rare-earth-corridor","status":"publish","type":"australianoutlook","link":"https:\/\/www.internationalaffairs.org.au\/australianoutlook\/critical-minerals-and-global-connectivity-indias-strategy-for-a-south-asian-rare-earth-corridor\/","title":{"rendered":"Critical Minerals and Global Connectivity: India\u2019s Strategy for a South Asian Rare Earth Corridor"},"content":{"rendered":"\n

India, which holds the world\u2019s fifth\u2011largest rare earth reserves, remains heavily dependent on China for 80-90% of its magnets and related materials. This vulnerability became clear when China tightened exports during a trade dispute, resuming supply only after India provided end\u2011user guarantees that the materials would not be re\u2011exported to the United States.<\/strong><\/p>\n\n\n\n

The global race for rare earth elements (REEs) has shifted from the margins of industrial policy to the centre of geopolitics. These seventeen elements, vital for electric vehicles, wind turbines, advanced electronics, and defence technologies, form the backbone of the energy transition and the digital economy. China<\/a> currently accounts for roughly 70% of global rare earth mining, 90% of rare earth separation and processing, and 93% of magnet manufacturing, which offers Beijing significant leverage over critical technologies and industrial production. This near\u2011monopoly has enabled China to use rare earth exports as a strategic leverage. The most cited examples include the 2010 and January 2026<\/a> restrictions on shipments to Japan during maritime disputes in the East China Sea, as well as more recent export controls<\/a> used in negotiations with the United States. As geopolitical tensions deepen, governments and industries are urgently seeking alternative sources of supply.<\/p>\n\n\n\n

India, which holds the world\u2019s fifth\u2011largest rare earth reserves – estimated by the U.S. Geological Survey<\/a> at 7 million tonnes, including cerium, dysprosium, lanthanum, neodymium, praseodymium, and terbium – remains heavily dependent on China for 80-90% of its magnets and related materials. This vulnerability became clear when China tightened exports during a trade dispute, resuming supply only after India provided end\u2011user guarantees<\/a> that the materials would not be re\u2011exported to the United States. The episode served as a strategic wake\u2011up call for New Delhi.<\/p>\n\n\n\n

Despite its sizeable reserves, India\u2019s rare earth sector has long been underdeveloped. Production has been limited and dominated by state\u2011owned enterprises such as Indian Rare Earths Limited<\/a>, whose regulatory framework historically discouraged private investment. This, in turn, constrained refining capacity and prevented India from fully capitalising on its resource base.<\/p>\n\n\n\n

To adapt to ground realities, India launched the National Critical Minerals Mission<\/a> in January 2025 to expand domestic exploration, processing, and value addition. The government has begun opening critical mineral exploration to private firms while strengthening cooperation with international partners through frameworks such as the Minerals Security Partnership<\/a> (MSP), which includes the United States, Japan, Australia, and several European countries. If sustained, these reforms could position India as a key player in diversifying global rare earth supply chains. Achieving this, however, requires moving beyond mining to develop robust refining and processing capabilities, areas where China still maintains overwhelming dominance.<\/p>\n\n\n\n

Within South Asia, India occupies a distinctive geostrategic position that is increasingly shaped by competing connectivity initiatives. China\u2019s Belt and Road Initiative<\/a> continue to expand infrastructure and economic linkages, while U.S.\u2011led Indo\u2011Pacific frameworks<\/a> seek to build alternative supply chains. In a sense, infrastructure investments, energy corridors, and connectivity projects have become a hallmark of strategic competition in South Asia and the Indian Ocean region. Rare earth resources are increasingly becoming part of broader strategic competition, linking resource security with infrastructure development and regional influence.<\/p>\n\n\n\n

India\u2019s regional initiatives, beginning with the Security and Growth for All in the Region (SAGAR) doctrine and recently expanded into the Mutual and Holistic Advancement for Security and Growth Across Regions<\/a> (MAHASAGAR), reflect a cooperative approach to regional development. These frameworks emphasise maritime cooperation, disaster relief, sustainable development, and economic connectivity across the Indian Ocean and South Asia. Integrating rare earth supply chains into this framework could open new avenues for collaboration with several regional states possessing deposits of critical minerals: Afghanistan (lanthanum, cerium, neodymium), Bangladesh (monazite, zircon), Myanmar (dysprosium, terbium), Nepal (tantalum, niobium), Bhutan (tungsten, lithium), and Sri Lanka (monazite, zircon). Yet these resources remain largely unexploited due to technological, regulatory, and financial constraints.<\/p>\n\n\n\n

According to the International Energy Agency<\/a>, global demand for rare earth elements is expected to increase three to sevenfold by 2040. As demand accelerates and geopolitical conflicts reshape supply networks, countries capable of providing stable and diversified sources of REEs will gain strategic influence. Collaborative exploration projects, joint processing facilities, technical training programmes, and industrial partnerships could help South Asian states leverage their mineral endowments while strengthening regional economic integration. India\u2019s combination of resource availability, technological capacity, and geopolitical positioning uniquely positions it to lead the development of regional value chains for rare earth extraction and processing. By doing so, New Delhi could enable South Asian states to participate more actively in global supply networks while reducing excessive reliance on external powers.<\/p>\n\n\n\n

India has also expanded international cooperation through the MSP framework, complementing broader efforts by partners such as Australia\u2019s Lynas Corporation<\/a>, the United States\u2019 Mountain Pass<\/a> mine, Japan<\/a>\u2019s diversification through overseas partnerships and recycling technologies, and the European Union\u2019s Critical Raw Materials Act<\/a>. Within this evolving architecture, India\u2019s contribution – particularly through collaboration with South Asian states – could significantly enhance global supply chain resilience. By linking regional production with global demand, India can help establish a more stable and diversified long\u2011term developmental trajectory that transcends regional rivalries.<\/p>\n\n\n\n

By strengthening domestic capacity, partnering with international producers, and fostering regional cooperation across South Asia, New Delhi can reinforce its broader role as a stabilising force in the region. A cooperative approach to critical minerals, one that connects resource development with regional connectivity and economic integration, offers the potential to transform RRE competition from a source of geopolitical tension into an opportunity for shared growth and stability.<\/p>\n\n\n\n

\n\n\n\n

Dr Dalbir Ahlawat<\/a> is a Senior Lecturer in Security Studies in the School of International Studies at Macquarie University, Sydney, Australia.<\/em> Dalbir.ahlawat@mq.edu.au<\/a><\/p>\n\n\n\n

This article is published under a Creative Commons Licence and may be republished with attribution.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

India, which holds the world\u2019s fifth\u2011largest rare earth reserves, remains heavily dependent on China for 80-90% of its magnets and related materials. 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