The US and China signed the London Agreement to end their tense trade standoff some days back. US President Donald Trump’s strategy of escalating tariffs to pressure China was counterbalanced by Beijing’s retaliatory measures, a mixed bag of counter-tariffs and “export controls” on critical minerals vital to solar, wind turbines, automobiles, aircraft and semiconductors, as well as to the military industry.
These restrictions, leveraging China’s dominance in rare earth elements and other strategic minerals resources, compelled Washington to negotiate. This display of China’s economic leverage raises complex concerns about India’s vulnerability to similar Chinese tactics in the event of heightened Sino-Indian geopolitical tension.
India’s ambitions to become a high-tech manufacturing powerhouse, a leader in the renewable energy transition and, ultimately, the world’s largest economy are at a critical juncture. They hinge precariously on a factor often overlooked: India’s access to and security of critical raw materials (CRMs).
While New Delhi articulates grand visions of an Aatmanirbhar Bharat (self-reliant India) for the future, the reality of its CRM dependency and the geopolitical tightrope it accordingly walks exposes a significant chasm between its aspirations and ground reality. The nation’s vulnerability in securing these indispensable minerals threatens to hobble its economic growth trajectory, derail its green energy transition, and ultimately undermine its “strategic autonomy.”
Achilles’ heel: CRM dependency
India’s economic and strategic goals are inextricably linked to a steady and secure supply of CRMs. India’s ambition of becoming a high-value manufacturing hub, a “Saudi Arabia of renewable energy sources” (to use a term once highlighted by Jeremy Rifkin) and Indian Prime Minister Narendra Modi’s vision of a developed nation by 2047 all demand vast quantities of lithium, cobalt, rare earth elements and others – at least 30 critical minerals.
These are the sinews of modern industry, powering everything from electric vehicles (EVs) and solar panels to advanced military industries to semiconductors.
Yet, a stark reality confronts India: its domestic reserves of many critical minerals are either negligible or commercially unviable. The much-touted lithium discovery in Jammu and Kashmir, for instance, offers promise but remains largely unassessed for commercial extraction, with only 20% deemed potentially viable.
Consequently, India finds itself in a precarious position, importing 100% of its lithium, cobalt, nickel, vanadium, niobium, germanium, rhenium, beryllium, tantalum, and strontium. For rare earth elements and lithium, China alone accounts for 50-60% of India’s imports.
This dependency is not merely an economic inconvenience; it is a profound strategic vulnerability. A disruption in the supply of these minerals could cripple India’s burgeoning EV industry, delay its ambitious target of 500 gigawatts of non-fossil fuel energy by 2030, and impede its “Make in India” and “Digital India” initiatives.
The International Energy Agency (IEA) estimates that a mere 10% reduction in cobalt supply could lead to a 20% increase in EV battery costs, directly impacting India’s adoption rates. Similarly, rare earths shortages could set back semiconductor manufacturing, undermining India’s technological aspirations.
China’s shadow, a potent threat to India’s 2047 vision
China’s near-monopoly over the global CRM supply chain casts a long, ominous shadow over India’s aspirations. China controls 60-70% of rare earth elements production, 85-90% of rare earths processing, 90-100% of graphite processing, and 65-74% of cobalt processing, and Beijing has effectively weaponized these minerals in geopolitical contests.
The 2010 rare earths export ban to Japan and recent restrictions on rare earths, such as the export bans on gallium and germanium in response to US semiconductor restrictions and the imposition of tariffs, serve as stark warnings of China’s willingness to leverage its dominance for strategic gain.
For India, this means that its grand vision of becoming a developed country by 2047 is not merely an internal challenge but one that can be actively thwarted by its northern neighbor. The 2020 Galwan Valley clash, a bloody confrontation that claimed 20 lives on the Indian side and an unknown number on the Chinese side, serves as a stark and tragic illustration of the perils inherent in India’s increasingly overt strategic alignment with the US.
Far from an isolated incident, the clash can be viewed as an inevitable consequence of New Delhi’s participation in Washington’s broader strategy of containing China. This policy directly challenges Beijing’s regional and global ambitions.
With the looming prospect of a renewed “Trump’s Tariff Pressure” era, there is a palpable risk that the Modi government may once again succumb to external influence, repeating a pattern of confrontational alignment that prioritizes perceived short-term security and hope for Indian access to American market over the long-term stability of its complex relationships, particularly with its powerful northern neighbor.
This persistent susceptibility to external pressures fundamentally undermines India’s claims of strategic autonomy, exposing its foreign policy as reactive rather than truly independent.
Beyond direct export controls, China’s financial might and technological prowess allow it to outcompete India in the global scramble for resources. With over $3.29 trillion in foreign exchange reserves, China can unilaterally finance large-scale mining projects across Africa, Latin America and Australia, securing long-term mineral supplies.
India, grappling with balance of payments deficits and limited foreign exchange reserves of around $696 billion in 2024, struggles to match China’s investment capacity. This financial disparity forces India into a position of relying on foreign partnerships and joint ventures for financing, while China can act with greater independence.
Furthermore, China’s advanced technical know-how in CRM exploration, mining and processing, coupled with a vast pool of skilled labor, gives it a significant competitive edge. China has developed cutting-edge capabilities in rare earths separation and lithium refining, establishing vertically integrated supply chains.
India, in contrast, remains reliant on imported equipment, outdated technologies, and less efficient and less productive talents with limited domestic processing facilities.
This technological gap, combined with a shortage of skilled geologists, mining engineers, metallurgists, and mineworkers, means India is forced to import refined minerals and rely on foreign technical expertise, further entrenching its dependency.
Without a concerted effort to bridge these financial, technological, and talent pool deficits, India’s ambition of catching up to China by 2047 remains a distant dream.
Illusion of strategic autonomy and the perils of a pro-American stance
India’s foreign policy, often characterized as “strategic autonomy,” aims to balance relationships with the Western bloc and the BRICS+ nations bloc.
While this multi-alignment strategy ostensibly offers flexibility in a multipolar world, its practical application, particularly India’s increasingly pro-American tilt and its stance on issues like the Israel-Iran conflict within forums such as the Shanghai Cooperation Organization (SCO), risks alienating key partners and undermining its stated autonomy.
The notion of “standing on two boats,” as some critics describe it, appears increasingly transactional and lacking in genuine strategic depth. India’s deepening ties with the US, including its participation in the Quad security dialogue and the US-led Minerals Security Partnership (MSP), are viewed by some as a precise alignment with the Western bloc.
While these partnerships offer access to alternative CRM sources and technology, they come with strings attached. Reliance on Russia for minerals like vanadium and nickel, for instance, exposes India to the risk of Western sanctions, as evidenced by the pressures on India’s oil imports from Iran in 2019.
Within the SCO and BRICS+ forums, India’s perceived pro-American stance, particularly its recent pro-Israel position in the Israel-Iran conflict, creates friction and raises questions about its commitment to collective action.
Such alignments can provoke countermeasures from China and Russia, potentially impacting India’s access to CRMs or undermining its influence within these non-Western groupings. The “limitless partnership” between China and Russia, for example, suggests a deepening alignment that could leave India isolated if it leans too heavily towards the West.
China, Pakistan and Bangladesh are reportedly planning to establish a new regional forum to replace the defunct South Asian Association for Regional Cooperation (SAARC), a move that could further isolate India in South Asia.
The inherent contradiction in India’s “strategic autonomy” is that it often appears to be autonomous from its traditional partner, Russia, and instead aligns with a new partner, the US, rather than pursuing a genuinely independent and equidistant foreign policy.
This delicate balancing act, if not executed with extreme diplomatic finesse, risks alienating both sides, leaving India vulnerable and without reliable allies when it most needs them for CRM security. The ambition to be a global player requires a more consistent and genuinely autonomous foreign policy rather than one that shifts with the geopolitical winds.
India talks the talk but doesn’t walk the walk.
India’s rhetoric on CRM security often outpaces its tangible actions, exposing a fundamental weakness and incapacity in securing these vital resources. Despite India’s launching initiatives like the “Critical Minerals Mission” and forming entities like Khanij Bidesh India Ltd. (KABIL) to acquire overseas assets, the scale of its efforts pales in comparison with its ambitions to be a powerhouse of green energy technology, a manufacturing hub and leader in the defense industry despite the formidable challenges it faces.
Consider the data: India imports 100% of ten critical minerals. While it has signed agreements with countries like Australia and Argentina for lithium and cobalt and joined the MSP, the actual impact on its import dependency remains limited. For instance, joint ventures with Australia secured only a nominal amount of India’s lithium imports in 2024.
India’s official total investment in African CRM mining is unavailable, as the country has just started investing in this sector, which is dwarfed by China’s $50 billion investment since 2010. This financial disparity is a critical impediment, limiting India’s ability to secure favorable agreements and compete effectively for global CRM resources.
The table below starkly illustrates India’s import dependency for key critical minerals:
Table No. 1: India 100% dependency on import CRMs list
The tables above and below highlight India’s significant reliance on external sources, with China playing a prominent role in the supply of many critical minerals. While India “talks the talk” of diversifying supply chains and achieving self-reliance, its “walk” remains hesitant and underfunded. Exacerbating this weakness are the gap in technical know-how in exploration, mining and processing and a shortage of skilled labor.
India’s limited processing facilities for lithium, cobalt, and nickel mean it largely imports refined minerals, perpetuating its dependency.
Table No. 2: India above 50% dependency on import CRMs list
The contrast with China is stark. China’s decades of strategic investment, technological advancement and workforce development have created a formidable, vertically integrated CRM supply chain.
India, in comparison, is playing catch-up, and the pace of its efforts suggests it could indeed lag behind China by 20-25 years in this critical domain. Without a significant ramp-up in investment, a more aggressive and consistent diplomatic strategy, and a genuine commitment to building domestic capabilities, India’s aspirations will remain just that—aspirations.
Beijing’s support is crucial for India’s economic growth, given China’s role as a significant trade partner and supplier of critical materials. However, India has limited influence on China’s economic trajectory. India’s future hinges on effectively managing its relationships with both China and the US.
Bhim Bhurtel is on X at @BhimBhurtel
