Critical minerals such as lithium, cobalt, graphite, rare earth elements (REEs), and silicon are the lifeblood of modern economies, powering everything from electric vehicles (EVs) and renewable energy systems to semiconductors and defence technologies. As the world races towards net-zero emissions, demand for these minerals is projected to quadruple by 2040 under the International Energy Agency’s (IEA) Sustainable Development Scenario. Yet, this transition is shadowed by a geopolitical fault line: China’s overwhelming dominance in the global supply chain.
For India, a nation aiming for 500 GW of non-fossil energy capacity by 2030 and 30% EV penetration, this reliance translates into acute vulnerabilities. Between 2019 and 2024, India imported over 40% of six key critical minerals from China: bismuth (85.6%), lithium (82%), silicon (76%), titanium (50.6%), tellurium (48.8%), and graphite (42.4%). This exposure not only risks economic disruptions but also undermines national security, demanding urgent diversification.
China’s Iron Grip: A Monopoly Built on Strategy and Scale
China’s supremacy in critical minerals is no accident; it stems from decades of deliberate policy, massive investments, and vertical integration. With reserves of 44 million tonnes of REEs at the end of 2023, over 30% of the global total, China mined 240,000 tonnes that year, dwarfing the United States’ 43,000 tonnes. Its dominance extends far beyond mining: China refines 87% of global REEs, 58% of lithium, 68% of silicon, 90% of graphite, and nearly all germanium, gallium, and tungsten.
The IEA’s Global Critical Minerals Outlook 2025 reveals that China holds an average of 70% market share in refining 19 of 20 key minerals, with the top three refining nations (led by China) controlling 86% of supply for energy minerals like nickel and cobalt, up from 82% in 2020. Strategic overseas investments fortify this control. Through its Belt and Road Initiative (BRI), China has poured over $1 trillion into global infrastructure, securing stakes in 80% of the Democratic Republic of Congo’s (DRC) cobalt production and 50% of Indonesia’s nickel output by 2025. In 2023 alone, China invested $19.4 billion in exploration, unearthing 132 new deposits, including 34 large ones. State-backed lending, three-quarters directed to Chinese ventures, has locked in joint ventures where host governments hold minimal equity.
China has weaponised this leverage repeatedly. In 2010, it halted REE exports to Japan amid a territorial dispute, spiking prices 500% globally and prompting WTO cases from the US, EU, and Japan. More recently, in December 2024, Beijing restricted exports of gallium, germanium, and antimony to the US, followed by controls on tungsten, tellurium, bismuth, indium, molybdenum, and seven heavy REEs in early 2025.
With reserves of 44 million tonnes of REEs at the end of 2023, over 30% of the global total, China mined 240,000 tonnes that year, dwarfing the United States’ 43,000 tonnes. Its dominance extends far beyond mining: China refines 87% of global REEs, 58% of lithium, 68% of silicon, 90% of graphite, and nearly all germanium, gallium, and tungsten
These moves, retaliatory against US tariffs, raised gallium prices 212% from $298/kg in 2020. While not always targeted at India, they signal Beijing’s calculus: restrict minerals critical to adversaries’ tech sectors without disrupting its own imports or exports. This ‘strategic ambiguity’ amplifies global uncertainty, with three-quarters of these minerals showing greater price volatility than oil.
India’s Precarious Dependence: A Data-Driven Diagnosis
India’s quest for self-reliance (Aatmanirbhar Bharat) is hobbled by import addiction. The Ministry of Mines identified 30 critical minerals in 2023 essential for economic and national security, yet India imports 100% of ten: lithium, cobalt, nickel, vanadium, niobium, germanium, rhenium, beryllium, tantalum, and strontium. Of these, China supplies the lion’s share — 60% of REEs and up to 85% for lithium, cobalt, nickel, and silicon. Lithium imports from China surged 921% in 2024 compared to 2023, graphite rose 85% from 2022 to 2024, and nickel jumped 137% in 2024 alone. Domestic reserves exist — India holds the fifth-largest REE deposits and recent lithium finds in Jammu & Kashmir — but exploration lags, with only 48% of auctioned blocks sold by early 2025. This dependency is structural. India’s mining sector suffers from outdated policies, environmental hurdles, and limited refining tech.
The Economic Survey 2023-24 warns that without addressing China’s reliance, India’s green transition — requiring 8,220 tonnes of REEs by 2030 — faces derailment. EVs and wind turbines alone will consume over 50% of projected REE demand (4,010 tonnes in 2025). Globally concentrated supply exacerbates risks: China’s 62% lithium refining share and 77% cobalt control mean any Beijing squeeze ripples to New Delhi.
The Ripple Effects: Economic and Security Perils
China’s control exacts a heavy toll on India, blending economic fragility with strategic peril. Economically, supply disruptions could inflate costs across high-growth sectors. A 2025 Takshashila Institution study identifies silicon, lithium, and titanium as ‘critical vulnerabilities’ due to their role in semiconductors, EVs, and solar panels — backbones of India’s $10 billion semiconductor initiative and National Solar Mission. Disruptions in silicon (76% from China) could halt electronics manufacturing, which employs millions and targets $300 billion in exports by 2030. Lithium shortages might delay EV adoption, raising battery costs 20-30% and undermining the 49% CAGR projected for India’s EV market through 2030. Price volatility compounds this: half of critical minerals fluctuate more than natural gas, per IEA data.
China’s 2025 restrictions already spiked REE prices, potentially adding $5-10 billion to India’s annual import bill. Broader impacts include stalled renewables — India’s 50% non-fossil target by 2030 needs 10x more cobalt and nickel — and defence delays. REEs power missiles, drones, and radars; a 2010-style embargo could cripple indigenous production under ‘Make in India’. Strategically, this erodes India’s autonomy. Beijing’s moves, like the April 2025 REE magnet curbs, expose New Delhi to ‘asymmetric leverage’. In a border-tense Indo-Pacific, China could throttle supplies during escalations, mirroring its Japan play. The IEEFA warns of ‘supply shocks’ stalling clean energy, while foreign ownership in African/Latin mines (80% Chinese in DRC) limits India’s access. Environmentally, reliance on China’s lax standards — REE refining generates 2,000 tonnes of toxic waste per tonne — risks India’s ESG commitments. Ultimately, this chokepoint hampers India’s rise as a tech superpower, widening the trade deficit ($85 billion with China in 2024) and ceding geopolitical ground.
Charting a Resilient Path: India’s Counterstrategies
India cannot afford paralysis; diversification is imperative. The government launched the National Critical Minerals Mission (NCMM) in January 2025, tasking the Geological Survey of India (GSI) with 1,200 exploration projects by 2031, including REEs. A Rs 3,500-5,000 crore scheme, approved in June 2025, incentivises domestic REE and magnet production via reverse bidding, targeting self-sufficiency within five years. KABIL, a joint venture of three PSUs, has secured lithium deals in Argentina (January 2024 MoU, expanded February 2025) and cobalt in Australia (five projects since 2023).
The Union government launched the NCMM in January 2025, tasking the GSI with 1,200 exploration projects by 2031, including REEs. A Rs 3,500-5,000 crore scheme, approved in June 2025, incentivises domestic REE and magnet production via reverse bidding, targeting self-sufficiency within five years
Multilaterally, India joined the Quad Critical Minerals Initiative in July 2025 and the Minerals Security Partnership, fostering ‘China+1’ chains with the US (October 2024 MoU for value chains) and the UK (£1.8 million for a Joint Observatory in August 2025). The Indo-Pacific Economic Framework’s 2023 minerals dialogue accelerates this. Domestically, $170 million in September 2025 funds recycling pilots, aiming for a circular economy — recovering minerals from e-waste could meet 20% of lithium needs by 2030. Innovation is key: R&D in bio-mining and alternatives like sodium batteries reduces mineral intensity. Stockpiling, modelled on China’s reserves, targets high-risk minerals (e.g., 100% imported germanium). Yet, challenges persist — high capital costs and tech gaps require fiscal incentives akin to semiconductors ($10 billion outlay). Private sector involvement, unlocked by amending the Mines and Minerals Act (removing six minerals from atomic lists), must surge.
Seizing Sovereignty in a Mineral-Scarce World
China’s critical minerals monopoly is a sword over India’s ambitions, threatening a $5 trillion economy by 2027 with supply shocks and security risks. Yet, it is also a clarion call. By scaling domestic production, forging alliances, and embracing recycling, India can forge resilient chains, slashing China’s dependency by 50% by 2030. Success demands bold policy — Rs 5,000 crore is a start, but tripling exploration budgets and tech transfers are non-negotiable. In this new ‘oil’ era, India’s path to strategic autonomy lies not in isolation, but in smart interdependence. Failure risks perpetual vulnerability; triumph positions India as a green tech leader, turning peril into power.
The writer is Special Advisor for South Asia at Parley Policy Initiative, Republic of Korea. He is a regular commentator on the issues of Water Security and Transboundary River issues in South Asia. The views expressed are of the writer and do not necessarily reflect the views of Raksha Anirveda
