India May Become 3rd Pillar In US-Japan Rare Earth Network

India stands at a historic crossroads in the global rare earth supply chain, with a unique opportunity to transform itself from a resource holder into a full-fledged processing and manufacturing powerhouse. A recent analysis in The Diplomat highlights how the Donald Trump–Xi Jinping summit in Busan, South Korea, has bought a one-year pause in China’s decade-long monopoly on rare earth exports — and why this brief respite could be the catalyst India needs to claim a decisive role in the global market.

India: A Turning Point in the Global Rare Earth Landscape

For over a decade, China has dominated the rare earth sector — controlling nearly 85% of the world’s processing and refining capacity. These materials, including neodymium, praseodymium, and dysprosium, are vital for producing magnets, motors, batteries, and defence systems. However, with Beijing agreeing to delay new export controls for one year following the Trump-Xi trade agreement, global players are seeking alternate supply chains.

And that is where India steps in.

According to The Diplomat, India’s beach-sand deposits along its coasts hold substantial reserves of monazite, bastnaesite, and other critical rare earth minerals. Yet, while India’s raw material base has long been recognized, its limited refining and magnet-making capacity has constrained progress. Now, this gap is beginning to close, supported by robust policy shifts, strategic intent, and international partnerships.

India’s Domestic Push: From Extraction to Refinement

In June 2025, New Delhi announced plans for a fiscal incentive scheme to attract private and global investors into rare earth magnet manufacturing. The government’s focus is clear — reduce dependence on Chinese supply chains and create an indigenous ecosystem capable of end-to-end production.

Companies like Sona Comstar are already establishing magnet production lines, while state-owned Indian Rare Earths Ltd. (IREL) has been tasked with scaling up refining capacities. The Indian Space Research Organisation (ISRO) is also lending technological expertise, adapting satellite-grade separation technologies for commercial refining applications — a move that could give India a critical edge in purity and efficiency.

India: Global Partnerships Under the Quad Framework

Equally significant is India’s international outreach. Under the Quad grouping — comprising India, the United States, Japan, and Australia — talks have intensified around joint exploration, co-financing, and technology-sharing initiatives. This strategic alignment not only diversifies supply chains but also embeds India within a democratic framework for rare earth collaboration.

As Harvard Kennedy School researcher Jianli Yang notes in The Diplomat, “With strong political will and a growing technological ecosystem, India could soon emerge as the third pillar — alongside the United States and Japan — of a democratic rare-earth network.”

The fifth-largest economy in the world brings both scale and credibility to the table. India’s manufacturing capacity can absorb and expand downstream industries such as motors, magnets, and batteries — something smaller rare-earth producers like Australia or Brazil cannot fully support.

India’s Strategic Advantage in the Rare Earth Race

Yang argues that while nations like Australia and Brazil are indispensable in mining and early-stage processing, India changes the entire calculus by combining supply diversification with market demand. “India can consume what it produces, export what it refines, and become a hub for both production and processing,” the analysis emphasizes.

Moreover, India’s industrial drive under Prime Minister Narendra Modi’s Atmanirbhar Bharat (self-reliant India) initiative enjoys rare bipartisan support, making the nation’s rare earth strategy less vulnerable to political reversals.

The White House, Yang suggests, should view India not merely as a defence or semiconductor partner but as a cornerstone of a “new rare earth alignment.” Washington could co-finance Indian magnet plants through the US International Development Finance Corporation or extend EXIM Bank guarantees to accelerate industrial build-up.