India is fast-tracking its critical mineral strategy, aiming to build domestic processing capacity and strengthen diplomatic ties to challenge China’s dominance in the market, amid rising geopolitical tensions and record mineral prices.
India is trying to turn critical-mineral security into a central plank of trade and industrial policy as ministers scramble to reduce exposure to supply chains still dominated by China. Speaking in New Delhi on 2 September, commerce and industry minister Piyush Goyal said India was negotiating collaborations with several countries, “with the US also”, to process and develop critical minerals for domestic needs. He said India was already part of the Critical Minerals Partnership and active in the Pax Silica grouping, while also in dialogue with the UK and Europe on more resilient supply chains. The message was clear: New Delhi no longer sees lithium, rare earths and related materials as a narrow mining issue, but as the plumbing of modern manufacturing.
The urgency has only sharpened. Reuters reported on 4 September that some Chinese rare-earth suppliers had stopped shipping to US customers because they feared punishment from Beijing if material was later traced to restricted end users. According to the report, some US companies have waited more than six months for mineral licences, while Indian and Japanese buyers face even tighter approvals. Prices for materials including yttrium, indium phosphide and tungsten remain near record levels. “China has been very effective in using rare earth export controls to impose restraint,” Reva Goujon of Rhodium Group told Reuters, underlining that the real leverage in this market lies in processing rules and export approvals, not simply in geology.
India’s answer is the National Critical Mineral Mission, approved in January 2025 and scheduled to run from 2024-25 to 2030-31. Government papers describe it as a ₹16,300 crore programme backed by a further ₹18,000 crore from public-sector companies and other stakeholders, taking the total planned outlay to ₹34,300 crore. The mission stretches from exploration and overseas acquisition to processing, strategic stockpiles and recycling. Official targets include 1,000 patents by 2030-31, seven centres of excellence and a ₹1,500 crore incentive scheme to build recycling capacity from e-waste, lithium-ion battery scrap and end-of-life vehicles. The government has said that scheme should create 270 kilotonnes of annual recycling capacity, recover 40 kilotonnes of critical minerals and generate nearly 70,000 jobs.
Yet the distance between policy and industrial capability remains large. In an interview with S&P Global Commodity Insights, Critical Minerals Association of India vice-chairman Rahul Kanuganti said India could begin to build meaningful rare-earth magnet capacity outside China between 2029 and 2031, but a fully integrated ecosystem was more likely between 2032 and 2035. He said India already has some mining, separation and oxide-refining capability through IREL, but is still weak in turning oxides into metals, metals into alloys and alloys into high-performance sintered magnets at scale. The government’s permanent magnet scheme targets 6,000 metric tonnes a year of integrated capacity, with first large facilities expected around 2028-29. Even that would fall short of projected demand of about 8,220 tonnes in 2030.
For now, India is trying to buy time abroad while it builds at home. Kanuganti told S&P that Australia looks like the most credible non-Chinese near-term source for key rare-earth inputs such as separated neodymium-praseodymium oxide, dysprosium and terbium. Beyond imports, India has also backed state-led acquisition: Khanij Bidesh India Ltd, the joint venture known as KABIL, secured exclusive rights over five lithium brine blocks in Argentina’s Catamarca province, with production expected after 2029. A broader diplomatic structure is emerging as well. An IMPRI analysis noted that external affairs minister S. Jaishankar and US secretary of state Marco Rubio signed a bilateral critical-minerals framework in May 2026, while the Quad countries said they could mobilise up to $20 billion for projects across the Indo-Pacific.
Other countries are moving just as quickly to capture more of the value chain. In Brazil, the Senate approved a strategic-minerals bill on 2 September after the lower house backed it on 6 May, and President Luiz Inácio Lula da Silva is expected to sign it. AP reported that the measure would create a legal framework for rare earths, a 2 billion reais federal guarantee fund for projects and 5 billion reais in tax credits over five years to encourage processing at home. Brazil says it has the world’s second-largest rare-earth reserves after China, and Lula has made clear he does not want to export raw potential. “We want Brazil to be the big winner of these riches,” he said in May.
But Brazil’s debate also shows the political and environmental cost of moving too fast. The legislation would allow a new national council to identify priority projects and screen some forms of foreign investment, a power critics say could add uncertainty even as it strengthens state control. Environmental groups have also attacked the bill. Suely Araújo of the Climate Observatory said critical minerals “cannot become a blank check for mining”. India’s own official strategy points to the same tension by putting unusual emphasis on recycling, secondary recovery and stockpiles rather than new extraction alone. If that part of the plan works, the country could ease import dependence without treating every mineral discovery as a licence to dig.
What emerges is less a replay of the oil age than a harder test of industrial depth. India is trying to secure mines, feedstock, refining, magnets, recycling and diplomatic cover at the same time. That is a more realistic reading of mineral security than the old assumption that access begins and ends at the pithead. But the timetable is unforgiving: Chinese licensing remains erratic, global competitors are subsidising their own processing chains, and by India’s own industry estimates the country will still need imports well into the next decade. The race, in other words, has already moved beyond finding rocks to building the capacity that turns them into power.
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