The China Factor In The New India-US Critical Minerals Deal

The United States and India signed a framework agreement during US Secretary of State Marco Rubio’s four-day visit to India, aimed at securing critical minerals supply chains amid concerns over China’s control of rare earths and strategic metals. The deal, announced in New Delhi, focuses on mining, processing, recycling, and investment in critical minerals essential for technology, defense, and clean energy sectors. The agreement comes as China dominates global rare earth mining (70%) and processing (90%), prompting Washington to diversify sourcing to reduce reliance on Beijing. The US imports 100% of 12 critical minerals and at least half of 29 others, with China supplying most of these. India holds reserves of 30 critical minerals, including lithium, cobalt, graphite, and rare earths like neodymium and dysprosium, as per a July 2023 Ministry of Mines report. Foreign Minister S Jaishankar described the framework as ‘timely and critical,’ emphasizing cooperation across the entire supply chain. Rubio highlighted the strategic partnership, stating the deal aligns with national security and innovation priorities. Critical minerals like lithium, cobalt, and rare earths are vital for batteries, semiconductors, drones, and military hardware, with disruptions posing economic and security risks. The US Energy Act of 2020 defines critical minerals as those essential to national security and vulnerable to supply chain disruptions. India’s reserves, spread across multiple states, could play a key role in reducing global dependence on China. The framework signals a broader effort to strengthen alternative supply chains amid geopolitical tensions over resource control.