China’s decision on October 9 to expand export restrictions on seven Rare Earth Elements (REEs) — vital for high-tech manufacturing and defence applications — has heightened global trade and geopolitical tensions. The move has deepened concerns about the world’s heavy reliance on China for critical mineral supplies. This latest salvo follows similar curbs introduced in April, with Beijing citing national security as the rationale. For India, the development carries significant economic and strategic implications, underscoring the need for a swift and well-coordinated policy response.
Just a day later, U.S. President Donald Trump responded to China's actions by announcing 100 percent tariffs on Chinese goods, effective November 1. He also unveiled new export restrictions on ‘critical software.’ The diplomatic fallout was immediate— Trump announced that he would not participate in the forthcoming APEC summit, and markets shuddered under the weight of uncertainty.
The Minerals That Power the Modern World
Rare Earths, often overlooked, are the unsung heroes of the digital age. They are the invisible backbone of modern industry, from smartphones and semiconductors to electric vehicles, satellites, solar panels, wind turbines, fiber optic networks, communication systems, drones, medical equipment, and defense systems. Their unique magnetic, catalytic, and luminescent properties make them indispensable for modern high-tech enterprises in energy, economy, defence, and space.
China dominates this domain like no other. It controls 70 percent of global raw materials, 83 percent of processing technology, and 92 percent of finished products. This supremacy stems from the 1980s, when the U.S. abandoned rare earth mining and processing due to environmental concerns, having wrongly classified them as part of Thorium. China embraced it, endured the environmental hazards and the human costs, and built a monopoly, positioning China to precept this new Great Game. The dominance that now haunts the very nation that once nurtured them is evident.
Rare Earths and National Security
These 17 elements of the rare Earth components are, by and large, converted into a single dominant finished product called Permanent Magnets or simply Magnets. They also serve applications such as Catalysts, phosphors, luminiscents, lasers, and ceramics. For simplification, Rare Earth Elements can be considered as synonymous with Magnets. The scale of the consumption of magnets in defence is staggering; while an electric car needs 3 to 5 kilograms of magnets, an F-35 fighter jet requires nearly 400 kilograms, and a submarine needs about 4 tonnes of magnets. These aren’t mere components—they are the hidden force behind electric systems, thermal stability, laser precision, optical systems, heat resistance, agility, and survivability in modern warfare. Without Magnets, the hardware of contemporary warfare would quite literally fall apart. They are equally crucial for space technologies to withstand a harsh and unpredictable environment.
India’s rare earth elements, primarily found in the form of monazite, bastnaesite, and allanite deposits, hold significant potential. Monazite, for instance, is deposited abundantly in coastal beach sands, with Andhra Pradesh holding around 3.69 million tonnes, Odisha 3.06 million tonnes, Tamil Nadu 2.46 million tonnes, and Kerala 1.84 million tonnes — amounting to roughly 11 million tonnes nationwide. Bastnaesite and allanite, on the other hand, are concentrated in the mountain rocks of Andhra Pradesh, Jharkhand, West Bengal, Karnataka, and Gujarat.
Among these, monazite represents the predominant and most accessible source of Rare Earths. Yet, the full chemical characteristics of India’s monazite deposits remain insufficiently studied. This lack of detailed information has been a significant barrier to developing domestic processing technologies. Kerala is the first state to take the lead in commissioning a pilot project to study the chemical characteristics of Monazite available to them. The Government of India should lead from the front by persuading other states to initiate pilot projects in line with Kerala, and simultaneously commence commercial production.
The Road Ahead
India relies entirely on imports to meet its magnet demand, with official data showing 26,000 metric tonnes imported in 2023. This figure is projected to double by 2030 due to rising industrial needs. Currently, Midwest Advanced Materials, based in Hyderabad, is the sole domestic producer, set to supply 500 metric tonnes of Rare Earth magnets annually starting January 2026. The remaining demand continues to be fulfilled through imports, underscoring the urgent need for enhanced domestic production.
In a swift strategic move, the government of India has launched the PLI scheme to address the economic viability gap to spur magnet production, an essential but insufficient step. The production target of 6000 tonnes under the PLI scheme will be unrealistic unless the supply chain is strengthened by involving state government agencies where monazite deposits are available. India urgently needs a high-powered Rare Earth Commission, modeled on the Atomic Energy Commission, by reorganizing the decades-old Indian Rare Earths Limited (IREL), focused on nuclear fuel extraction with Rare Earths as byproducts. This initiative will prioritize Rare Earths development and exploration, spearhead R&D, advance process technology, forge international partnerships to secure critical supply chains, develop alternative technologies, and build a strategic ecosystem in the backdrop of shifting geopolitical dynamics. Research is already underway in the US and elsewhere to establish technologies alternative to the Rare Earth components.
Countering China’s monopoly, however, will not be easy. Beijing could undercut global efforts by dumping processed minerals at artificially low prices, discouraging foreign investment in mining and research. Nevertheless, we must develop robust strategies to counter such tactics. Having missed the Industrial Revolution and endured decades of energy scarcity, India cannot afford to lag behind in the ongoing high-tech revolution. As China wields rare earths as both an economic and geopolitical weapon, India faces a critical choice: act decisively now or risk strategic dependence that could severely undermine its economy, energy security, and national security.
Dr. Bhaskar is a former Diplomat, economist, and Author of the book ‘Energy Security and Economic Development in India: A Holistic Approach’, published by TERI. He served both in the US and China.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com)
Just a day later, U.S. President Donald Trump responded to China's actions by announcing 100 percent tariffs on Chinese goods, effective November 1. He also unveiled new export restrictions on ‘critical software.’ The diplomatic fallout was immediate— Trump announced that he would not participate in the forthcoming APEC summit, and markets shuddered under the weight of uncertainty.
The Minerals That Power the Modern World
Rare Earths, often overlooked, are the unsung heroes of the digital age. They are the invisible backbone of modern industry, from smartphones and semiconductors to electric vehicles, satellites, solar panels, wind turbines, fiber optic networks, communication systems, drones, medical equipment, and defense systems. Their unique magnetic, catalytic, and luminescent properties make them indispensable for modern high-tech enterprises in energy, economy, defence, and space.
China dominates this domain like no other. It controls 70 percent of global raw materials, 83 percent of processing technology, and 92 percent of finished products. This supremacy stems from the 1980s, when the U.S. abandoned rare earth mining and processing due to environmental concerns, having wrongly classified them as part of Thorium. China embraced it, endured the environmental hazards and the human costs, and built a monopoly, positioning China to precept this new Great Game. The dominance that now haunts the very nation that once nurtured them is evident.
Rare Earths and National Security
These 17 elements of the rare Earth components are, by and large, converted into a single dominant finished product called Permanent Magnets or simply Magnets. They also serve applications such as Catalysts, phosphors, luminiscents, lasers, and ceramics. For simplification, Rare Earth Elements can be considered as synonymous with Magnets. The scale of the consumption of magnets in defence is staggering; while an electric car needs 3 to 5 kilograms of magnets, an F-35 fighter jet requires nearly 400 kilograms, and a submarine needs about 4 tonnes of magnets. These aren’t mere components—they are the hidden force behind electric systems, thermal stability, laser precision, optical systems, heat resistance, agility, and survivability in modern warfare. Without Magnets, the hardware of contemporary warfare would quite literally fall apart. They are equally crucial for space technologies to withstand a harsh and unpredictable environment.
India’s rare earth elements, primarily found in the form of monazite, bastnaesite, and allanite deposits, hold significant potential. Monazite, for instance, is deposited abundantly in coastal beach sands, with Andhra Pradesh holding around 3.69 million tonnes, Odisha 3.06 million tonnes, Tamil Nadu 2.46 million tonnes, and Kerala 1.84 million tonnes — amounting to roughly 11 million tonnes nationwide. Bastnaesite and allanite, on the other hand, are concentrated in the mountain rocks of Andhra Pradesh, Jharkhand, West Bengal, Karnataka, and Gujarat.
Among these, monazite represents the predominant and most accessible source of Rare Earths. Yet, the full chemical characteristics of India’s monazite deposits remain insufficiently studied. This lack of detailed information has been a significant barrier to developing domestic processing technologies. Kerala is the first state to take the lead in commissioning a pilot project to study the chemical characteristics of Monazite available to them. The Government of India should lead from the front by persuading other states to initiate pilot projects in line with Kerala, and simultaneously commence commercial production.
The Road Ahead
India relies entirely on imports to meet its magnet demand, with official data showing 26,000 metric tonnes imported in 2023. This figure is projected to double by 2030 due to rising industrial needs. Currently, Midwest Advanced Materials, based in Hyderabad, is the sole domestic producer, set to supply 500 metric tonnes of Rare Earth magnets annually starting January 2026. The remaining demand continues to be fulfilled through imports, underscoring the urgent need for enhanced domestic production.
In a swift strategic move, the government of India has launched the PLI scheme to address the economic viability gap to spur magnet production, an essential but insufficient step. The production target of 6000 tonnes under the PLI scheme will be unrealistic unless the supply chain is strengthened by involving state government agencies where monazite deposits are available. India urgently needs a high-powered Rare Earth Commission, modeled on the Atomic Energy Commission, by reorganizing the decades-old Indian Rare Earths Limited (IREL), focused on nuclear fuel extraction with Rare Earths as byproducts. This initiative will prioritize Rare Earths development and exploration, spearhead R&D, advance process technology, forge international partnerships to secure critical supply chains, develop alternative technologies, and build a strategic ecosystem in the backdrop of shifting geopolitical dynamics. Research is already underway in the US and elsewhere to establish technologies alternative to the Rare Earth components.
Countering China’s monopoly, however, will not be easy. Beijing could undercut global efforts by dumping processed minerals at artificially low prices, discouraging foreign investment in mining and research. Nevertheless, we must develop robust strategies to counter such tactics. Having missed the Industrial Revolution and endured decades of energy scarcity, India cannot afford to lag behind in the ongoing high-tech revolution. As China wields rare earths as both an economic and geopolitical weapon, India faces a critical choice: act decisively now or risk strategic dependence that could severely undermine its economy, energy security, and national security.
Dr. Bhaskar is a former Diplomat, economist, and Author of the book ‘Energy Security and Economic Development in India: A Holistic Approach’, published by TERI. He served both in the US and China.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com)
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