China's Minerals Monopoly: Threat to Indian Manufacturing
Embedded Files
Global Dependence on China: China controls over 90% of processing and 70% of extraction for critical minerals essential to advanced technologies like EVs, semiconductors, defence systems, and renewable energy. This monopoly threatens global manufacturing stability and strategic autonomy.
India's Strategic Vulnerability: India's limited reserves, slow value chain, and heavy dependence on China for critical minerals have exposed its industrial and defence sectors, with real-world impacts like Maruti Suzuki slashing EV production targets.
Insufficient Domestic Efforts: While India has launched exploration, auctions, and incentive schemes, the value chain remains misaligned—mining takes too long, processing is lacking, and manufacturing suffers due to unreliable supply.
Need for Integrated Policy and Global Partnerships: India must adopt an ecosystem-level strategy involving faster clearances, public-private coordination, and strategic reserves. Collaborations with Japan, Australia, and the U.S. are essential to secure diversified supply.
Geopolitical and Economic Consequences: China's deliberate use of mineral exports as leverage amounts to economic coercion. To counter this, India and democracies must treat critical minerals as a national security priority, akin to nuclear or space programmes.
For more read the full article .....
Tags: Critical Minerals, China Monopoly, India Manufacturing, Mineral Security, Rare Earths
Independent, fact-checked journalism URGENTLY needs your support. Please consider SUPPORTING the EXPERTX today.
JUNE 2025
In the age of drones, electric vehicles, artificial intelligence, stealth aircraft, and renewable energy, a new class of strategic resources has emerged: critical minerals.
These minerals underpin technologies that define the modern economy and global security.
From neodymium in wind turbine magnets to gallium in semiconductors and lithium in EV batteries, critical minerals are essential to the functioning of nearly every advanced industry.
The problem?
China controls the lion's share of this supply chain, posing a grave risk to global manufacturing, economic sovereignty, and even world peace.
India stands as a stark example of the vulnerabilities that this monopoly creates.
“
China controls the lion's share of this supply chain...
Despite its ambitions to become a manufacturing hub and a global player in advanced industries, India's dependence on Chinese critical minerals has exposed its strategic fragility.
India has limited domestic reserves, rudimentary processing capabilities, and a misaligned value chain that takes far too long to develop. Meanwhile, China’s stranglehold on these resources continues to tighten.
The implications extend far beyond India.
China controls 50% of known reserves, 70% of extraction, and over 90% of processing capacity for these minerals globally.
It has used this dominance as an economic weapon, cutting off supply to Japan during diplomatic tensions in 2010 and now using similar tactics against India.
The United States, despite its military might and technological prowess, remains perilously dependent on China for crucial components of its defence manufacturing.
Rare earth magnets made with samarium and dysprosium are vital for missiles, fighter jets, and surveillance gear. With China's export restrictions in place, Western military capabilities face potential disruption.
This is not a theoretical concern.
India's auto sector has already felt the tremors.
Maruti Suzuki, the country's largest carmaker, had to slash its electric vehicle production targets by two-thirds due to rare earth shortages.
The planned output for its maiden electric vehicle, the e-Vitara, dropped from 26,500 to just 8,200 units between April and September.
While the company hopes to ramp up production later, the message is clear: without a secure and diversified supply of critical minerals, India cannot achieve its industrial goals.
Yet, India is not sitting idle.
The government has initiated exploratory projects through the Geological Survey of India and auctioned REE blocks in Uttar Pradesh and Karnataka.
Public-sector units like IREL and institutions like BARC are developing rare earth processing technologies.
Private players, including Vedanta and Midwest Advanced Materials, have stepped into the fray.
A Production Linked Incentive (PLI) scheme worth nearly ₹3000 crore is in the works to boost rare earth magnet manufacturing.
But these efforts are piecemeal and insufficient.
“
India's auto sector has already felt the tremors
The core issue lies in the chronological mismatch within the value chain, which has profound economic consequences.
Mining projects globally have an average gestation period of 10 to 15 years before becoming operational, largely due to complex licensing, exploration, and environmental clearances.
Processing units, which transform raw ores into usable forms, typically take 5 to 10 years to construct and optimise due to technological and capital intensity.
In contrast, downstream manufacturing facilities, such as those for electric vehicles or electronics, can begin production in as little as 2 to 3 years.
This misalignment results in what economists term a 'market coordination failure': investors are hesitant to commit capital to any single stage of the chain without certainty of synchronized development across the entire ecosystem.
Similar Stories you may be interested
For example, a 2022 report by the International Energy Agency noted that investment in mining grew only 20% globally over the last five years, compared to a 300% increase in demand for rare earth magnets.
The lack of coordinated timelines is a major deterrent to long-term private capital, leaving critical supply gaps in a world racing toward electrification and digital transformation.
What is needed is an integrated, ecosystem-level policy that intervenes strategically at multiple points in the value chain.
The Indian government must reduce the lead time for mining by pre-clearing licences and environmental permissions.
Simultaneously, it should build midstream processing capacity either through public entities or tightly regulated private oligopolies.
One viable model could mimic the Food Corporation of India's approach to grain procurement: the state buys processed minerals at a fixed price and maintains strategic reserves, releasing supplies based on industry demand.
“
The Indian government must reduce the lead time for mining
Another approach is a MMTC-style trading entity with a mandate to ensure price and supply stability, buying from domestic producers and supplementing with imports if necessary.
The key is to guarantee that critical minerals are available 'on tap' for manufacturers, eliminating the uncertainty that currently hampers investment.
India must also look outward.
Strategic partnerships with Japan, Australia, and the United States through forums like the Critical Minerals Partnership are a step in the right direction.
Japan, having learned its lesson after China abruptly cut off rare earth supplies in 2010, causing prices to skyrocket by over 700%, has since built strategic reserves and diversified its
supply chains by investing in countries like Vietnam and Kazakhstan.
Australia, meanwhile, is home to 55 million tonnes of rare earth reserves, the fifth-largest globally, and is a key supplier to non-Chinese markets.
The U.S., through its Department of Energy, is investing over $200 million to establish domestic processing and refining capacity for rare earths.
The EXPERTX Analysis coverage is funded by people like you.
Will you help our independent journalism FREE to all? SUPPORT US
Similar Stories you may be interested
India should follow suit by creating bilateral resource-security pacts and investing in high-risk but high-yield regions.
It must explore resource-rich but geopolitically sensitive areas like northern Myanmar, which holds vast deposits of heavy rare earth elements (HREEs) and currently supplies over 40% of China’s rare earth feedstock.
With the right diplomatic engagement and multinational oversight, India could tap into these reserves while promoting responsible mining practices and supporting local communities.
“
Additionally, India must accept that not all processing will happen domestically
Simultaneously, India should invest in African countries like the Democratic Republic of Congo, which holds over 60% of global cobalt reserves, and Madagascar, rich in graphite and nickel, crucial for EV battery technologies.
Additionally, India must accept that not all processing will happen domestically.
Countries like Indonesia may demand that processing units be built locally as a condition for resource access.
This is a fair price to pay for derisking the supply chain and can be turned into a strength if Indian companies and engineers play a central role in global operations.
The danger of continuing the status quo cannot be overstated.
China's weaponisation of critical minerals is deliberate, strategic, and effective.
It has already disrupted supply chains, hampered technological progress, and exposed vulnerabilities in defence sectors across the globe.
This is economic coercion with geopolitical consequences.
The longer democracies wait to respond with coordinated action, the more entrenched China's dominance becomes.
Western nations once held sway in the critical minerals domain but gave it up in pursuit of short-term profit, shutting down mines and processing units that were deemed unviable.
“
This is economic coercion with geopolitical consequences
China, by contrast, took a long-term view, subsidising processing to gain control of downstream industries.
Now, the West and countries like India are paying the price.
The road ahead for India requires clarity of vision, strategic coordination, and political will. The effort must be comparable in scale to the country's space or nuclear programs.
Indian Engineers, geologists, industrialists, and diplomats must work in tandem.
The private sector needs clear incentives and support, while public-sector institutions must be empowered and modernised.
This is not just an economic issue.
It is a question of national security, technological sovereignty, and geopolitical autonomy.
As the digital and electric age unfolds, whoever controls the supply of critical minerals controls the pace and direction of global progress.
The writing is on the wall.
China has built an empire on critical minerals.
The rest of the world, including India, must now act with urgency, foresight, and unity to break free from this exploitative domination.
The future of peace, prosperity, and progress depends on it.
The EXPERTX Analysis coverage is funded by people like you.
Will you help our independent journalism FREE to all? SUPPORT US
To Comment: connect@expertx.org
Support Us - It's advertisement free journalism, unbiased, providing high quality researched contents.
Google Sites
Report abuse