Context
- China has tightened export restrictions on rare earth elements amid a trade war with the United States.
- This has heightened geopolitical tensions and exposed global supply chain vulnerabilities.
- Countries like India and the US are heavily dependent on China for these strategic minerals.
Key Highlights
- China added five rare earth elements to its export control list effective 8 November 2025.
- US President Donald Trump responded by threatening 100 percent tariffs on Chinese products.
- China controls over 60 percent of global rare earth mining and over 90 percent of processing capacity.
- India imported 2270 tonnes of rare earths in 2023–24, with 65 percent coming from China.
Detailed Insights
- Rare earth elements like holmium, erbium, thulium, europium and ytterbium are crucial for:
- Electronics and semiconductors
- Electric motors and magnets
- Missile guidance systems and defence
- Lasers and renewable energy systems
- China developed dominance in rare earths through strategic investments since 1987.
- Rare earth export curbs are now used by China as geoeconomic leverage.
- Companies must now obtain export licenses, slowing access and increasing uncertainty.
- India lacks refining and magnet manufacturing infrastructure, limiting self-reliance.
- India is exploring deep sea mining in the Andaman Sea and setting up industrial parks.
- The US seeks to collaborate with India, Japan and Australia via the Mineral Security Partnership MSP.
Impact on India
- Import dependence on China creates a national security risk.
- Rare earths are vital for Make in India in:
- Semiconductors
- EV batteries and renewable energy
- Defence equipment manufacturing
- India must secure minerals to reduce strategic vulnerabilities.
Government Efforts
- National Mineral Exploration Policy 2016
- Deep Ocean Mission for seabed minerals
- Critical Minerals List 2023
- IREL Limited as India’s leading rare earth producer
Challenges
- Lack of refining and processing technology
- Environmental risks from mining and radiation
- China’s price control tactics
- Weak private sector participation
Way Forward
- Build mineral supply partnerships with trusted countries
- Develop domestic refining and magnet industries
- Create strategic mineral reserves
- Promote e-waste recycling for mineral recovery
- Encourage public–private investment in technology