In a world increasingly defined by technological rivalry and strategic competition, rare earth minerals have become the latest flashpoint between global powers. Recent months have seen both China and the United States tightening their grip on these critical resources, with ripple effects reaching far beyond their borders—especially in India, whose ambitions for industrial and defense self-reliance now hang in the balance.
Optimism briefly flickered in August 2025, when high-level talks between India and China raised hopes that Beijing might relax its stranglehold on rare earth exports. But those hopes were dashed on October 9, when the Chinese commerce ministry announced sweeping new export restrictions. According to The Indian Express, these measures specifically target rival nations such as India, requiring special licenses for imports and strict certification that any rare earths used for civilian purposes would not be diverted to defense industries or third countries.
China’s move, as reported by The Indian Express, is part of a broader strategy to leverage its near-monopoly—controlling roughly 70% of global rare earth supply—against economic and strategic competitors. The new policy, reminiscent of Cold War-era technology denial regimes, introduces stringent oversight to verify end users and complicates the import process for Indian manufacturers. The restrictions are particularly aimed at defense and dual-use industrial products, echoing similar limitations imposed on the United States and Europe.
Why does this matter so much? Rare earth elements, a group of 17 chemically similar metals, are the secret sauce behind everything from smartphones and electric vehicles to advanced missiles and medical diagnostic equipment. Without a steady supply, high-tech industries grind to a halt. For India, which has been making significant strides in automotive, electronics, and defense manufacturing, the risk is acute. As The Indian Express notes, any disruption could severely impact both civilian and defense sectors, threatening to stall the country’s progress just as it’s gaining momentum in global markets.
The United States, too, is feeling the heat. On October 15, Treasury Secretary Scott Bessent told CNBC that the Trump administration would ramp up direct government stakes in strategic companies—including rare earth miners like MP Materials and technology giants like Intel Corp—to counter China’s export restrictions. "So when you are facing a non-market economy like China, then you have to exercise industrial policy," Bessent said. The administration is also setting price floors and building strategic stockpiles for rare earths, with plans to expand these measures to other sectors vital to national security.
Bessent’s remarks underscore a major policy shift: Washington is moving away from simple subsidies and toward direct intervention in the market, targeting seven key industries—rare earths, semiconductors, pharmaceuticals, steel, and others. "We're not going to come in and take stakes in non-strategic industries, but we've identified seven industries to develop domestically," he told CNBC. Bessent also took aim at defense contractors, criticizing them for lagging behind on deliveries and research. "I do think our defence companies are woefully behind in terms of deliveries, so we may have to, as their biggest customer ... prod them to do a little more research, a little fewer stock buybacks, which is really what got Boeing into trouble," he said.
For India, the challenge is even greater. The country relies heavily on Chinese rare earths for its burgeoning high-tech and defense industries, yet finds itself with little to offer in return as a bargaining chip. Recognizing the urgency, New Delhi has launched a multi-pronged strategy to secure its supply chains. According to The Indian Express, the government has set up a National Critical Mineral Stockpile (NCMS) and a National Critical Minerals Mission (NCMM), allocating Rs 500 crore to buffer against supply shocks. An inter-ministerial panel has also approved a substantial incentive scheme—worth Rs 7,300 crore—to produce up to 6,000 tonnes of rare earth magnets over the next five years.
But India isn’t stopping there. The country boasts the world’s third-largest deposits of rare earth elements—an estimated 7.23 million tonnes of rare earth oxide, mostly along the coasts of Andhra Pradesh, Odisha, Tamil Nadu, Kerala, and in parts of West Bengal, Jharkhand, Gujarat, and Maharashtra. To tap this potential, the Mines Ministry has ramped up auctions of strategic mineral blocks, awarding 34 out of 55 blocks by mid-October 2025, with a sixth round of auctions launched in September.
International partnerships are also high on the agenda. India is actively engaging with Australia, the United States, and Japan, and is a key participant in the QUAD Critical Minerals Initiative, announced on July 1, 2025. This multilateral effort aims to promote joint investments and research, forging a unified industrial strategy among member countries. On the trade front, Commerce Minister Piyush Goyal has emphasized diversification, pursuing agreements with Chile and Peru and seeking mining rights in African nations. The government is also encouraging domestic startups to explore recycling as a source of critical minerals.
All these efforts are geared toward one goal: self-sufficiency. The Indian government aims to build a two-month reserve of essential rare earth materials, ensuring that industries can weather future supply shocks. As The Indian Express points out, if India can implement these strategies with urgency and efficiency, it could not only meet its own needs but also emerge as a major exporter of rare earths within the next decade.
Yet, the path ahead is fraught with challenges. China’s assertive stance signals its intent to dictate the rules of the global economy, using rare earths as both a bargaining chip and a weapon. The U.S. response—greater state intervention and pressure on defense contractors—reflects a growing willingness to break with free-market orthodoxy in favor of national security imperatives. Meanwhile, India must accelerate reforms, attract private investment, and deepen international cooperation if it hopes to secure its place in the new industrial order.
As the world’s tech giants and military powers vie for control over rare earths, the stakes couldn’t be higher. The outcome will shape not just the future of global supply chains, but the very balance of economic and strategic power in the 21st century.
