India Green Mobility at Risk, The Urgent Need for Rare Earth Mineral Strategy

India Green Mobility at Risk, The Urgent Need for Rare Earth Mineral Strategy

Why in News?

India’s ambitious push for electric vehicles (EVs) faces a significant threat not from production delays or policy lapses, but from a hidden and critical bottleneck—scarcity of rare earth minerals. These minerals are essential to the functioning of EV motors and batteries, yet India remains heavily dependent on a single, politically sensitive supplier: China. As global clean-tech geopolitics intensify, India is now compelled to rethink its mineral sourcing and domestic strategies.

Introduction

India’s electric mobility revolution is gathering speed, backed by government incentives and rising consumer demand. However, a major vulnerability lies in its dependence on rare earth elements such as neodymium, praseodymium, lithium, and dysprosium, which are indispensable for EV motors and batteries. Most of these minerals are currently imported from China, which controls over 70% of global production and about 90% of refining capacity. This overreliance poses a strategic risk that could derail India’s clean-tech ambitions.

Key Issues and Strategic Concerns

1. China’s Dominance in Rare Earths

   • China’s tightening of rare earth exports in 2023 exposed India’s vulnerability. A single policy shift by Beijing reminded the world of China’s control over the clean-tech supply chain.

   • Indian companies rushed to stockpile magnets, but these were only short-term solutions. Long-term security demands deeper reforms.

2. Ineffectiveness of Rerouting Tactics

   • Countries like the US have attempted to bypass Chinese controls by rerouting shipments through third-party nations. However, such methods have proven partially effective and ultimately unsustainable.

   • China has responded by tightening indirect shipment regulations and surveillance, further tightening its grip on global supply chains.

3. The Need for Diversification

   • India must diversify its sources by collaborating with diplomatically aligned countries like Australia and mineral-rich nations in Africa.

   • Africa’s vast reserves of lithium, cobalt, and copper offer promising investment opportunities.

4. Strengthening Domestic Capability

   • India needs to build its domestic supply chain from the ground up. This involves:

     • Encouraging domestic mining

     • Creating refining capacities

     • Heavily investing in R&D for substitutes and processing technology

5. Technology Partnerships and FDI Strategy

   • India must pursue partnerships that offer knowledge transfer in refining and clean-tech manufacturing.

   • A calibrated approach to Chinese FDI—with strict mandates for technology sharing—could bring in know-how without compromising national interests.

Challenges and the Way Forward

India’s long-term EV success hinges not on vehicle assembly lines but on securing rare earths. Key steps forward include:

• Short-term relief through diversified imports

• Medium-term investment in African and Australian mining sectors

• Long-term resilience through domestic production, refining, and R&D

Building a self-reliant mineral ecosystem is not just industrial policy—it’s national strategy. As global competition for minerals intensifies, India must act with foresight and boldness.

Conclusion

India’s green transition can only be as strong as its rare earth supply chain. The mineral imperative is not a future concern—it is an immediate one. Strategic partnerships, domestic innovation, and mineral diplomacy must work in tandem. The true test of India’s EV revolution will not be in the factory, but in the mines, labs, and policy rooms shaping its mineral future.

Q&A Section

1. Why are rare earth minerals important for India’s EV sector?
Rare earth minerals like lithium, neodymium, and praseodymium are critical components in EV motors and batteries, without which electric vehicles cannot function.

2. Why is China’s control over rare earths a concern?
China controls over 70% of rare earth production and nearly 90% of global refining. Any export policy changes from China can severely impact global and Indian supply chains.

3. What has been India’s short-term response to rare earth shortages?
Indian manufacturers have built up magnet stockpiles and attempted to reroute shipments through third-party countries, though these are temporary fixes.

4. What steps should India take to reduce dependency on China?
India should diversify imports by investing in Africa and Australia, incentivize domestic mining, develop refining capacities, and fund R&D for alternatives.

5. How can foreign partnerships help India’s mineral strategy?
Strategic foreign collaborations can offer knowledge-sharing, technological advancement, and infrastructure development, especially in refining and rare earth processing.