India, Russia Discuss Rare Earth Mineral Extraction Amid U.S. Pressure on Oil Trade
📚 Table of Contents
- Introduction
- Why Rare Earth Minerals Matter: Global and Indian Context
- India-Russia Strategic Talks: What Was Discussed?
- China’s Export Curbs: The Bigger Picture
- US Tariffs on Indian Goods: Economic & Strategic Pressure
- Global Geopolitics of Energy and Minerals
- The Critical Minerals Race: Where India Stands
- Strategic Benefits of India-Russia Collaboration
- Expert Opinions & Industry Reactions
- Future Prospects and Recommendations
- Conclusion
- FAQs
🧭 1. Introduction
In today’s fragmented geopolitical landscape, India is walking a tightrope between Western alliances and Eastern partnerships. On August 7, 2025, high-level talks between India and Russia signaled a bold move to deepen industrial collaboration — ranging from rare earth minerals to aerospace innovation. These discussions come as New Delhi faces growing pressure from Washington to curb its oil imports from Moscow, highlighting the complex balancing act India must perform.
At the same time, China’s dominance in the rare earth supply chain has disrupted Indian sectors like electric vehicles and advanced electronics. With the U.S. intensifying tariff wars and protectionist policies, India’s recalibration towards Russia is not just diplomatic — it’s strategic.
This evolving alliance could be a game-changer for India’s industrial self-reliance, economic resilience, and global competitiveness. As energy security and material access become battlegrounds of the 21st century, India's choices today will define its industrial future.
Let’s explore how this Indo-Russian alignment could reshape India's economic trajectory, reduce dependency on volatile supply chains, and strengthen its position in the new world order.
🌍 2. Why Rare Earth Minerals Matter: Global and Indian Context
Rare earth elements (REEs) — a group of 17 metals like neodymium, lanthanum, and dysprosium — are essential to modern technology and energy systems. From smartphones and electric vehicles (EVs) to satellites, wind turbines, and fighter jets, these minerals are critical to national security, industrial innovation, and green energy transitions.
🔍 Why REEs Are Indispensable
- Neodymium: Core component of high-power magnets used in EV motors and wind turbines.
- Lanthanum: Used in camera lenses, hybrid batteries, and optical glass.
- Dysprosium: Adds heat resistance to EV motors and nuclear reactor control rods.
Without these elements, much of the modern world's digital and sustainable infrastructure would grind to a halt.
🌐 Global Control and Dependence
- China controls an estimated 85–95% of the global rare earth processing market.
- According to the USGS 2024 Report, China produced 210,000 metric tons of REEs in 2023 — the world's largest output.
- In contrast, India produced only ~2,900 metric tons, despite having substantial reserves.
🇮🇳 India’s Missed Opportunity
India is blessed with abundant REE reserves, especially in Andhra Pradesh, Jharkhand, and Kerala, but lacks the infrastructure and technological capability to process them independently. As a result:
- India imports most of its refined rare earths from China.
- The nation is vulnerable to geopolitical disruptions and price shocks.
- India's EV and renewable energy industries face high risk due to limited domestic supply chains.
⚠️ Wake-Up Call: China's Export Restrictions
In late 2024, China imposed fresh export curbs on seven key REEs, including those vital to green tech and defense. This has tightened global supply and placed pressure on countries like India to secure alternate sources and build domestic capabilities.
✅ What India Needs to Do
- Invest in advanced REE extraction & processing tech
- Encourage public-private partnerships to develop value chains
- Collaborate with countries like Australia and Russia for technology and resource-sharing
- Establish strategic stockpiles to guard against supply disruptions
Rare earth minerals are the backbone of the 21st-century economy. For India, developing a robust rare earth ecosystem is no longer a choice — it's a necessity for strategic autonomy, green growth, and economic resilience.
🤝 3. India-Russia Strategic Talks: What Was Discussed?
India and Russia recently held high-level strategic talks focused on deepening bilateral industrial and technological collaboration. According to the Ministry of Commerce and Industry, the dialogue saw participation from over 80 delegates, including top industry leaders, highlighting the significance of the partnership amidst a shifting global order.
These talks come at a time when geopolitical realignments and sanctions on Russia are reshaping global supply chains. For India, the discussions represent not just diplomatic outreach, but also a calculated move to reduce dependency on Western technology and critical materials.
🔑 Key Areas of Strategic Cooperation:
1. Rare Earth & Critical Minerals
India is actively seeking access to Russia’s vast deposits of rare earth elements—crucial for electric vehicles, electronics, and renewable energy systems. This cooperation could boost India's efforts in self-reliant technology manufacturing (Aatmanirbhar Bharat).
2. Underground Coal Gasification
This clean-tech approach enables India to utilize its coal reserves more sustainably, with Russia offering advanced techniques in in-situ gasification to extract syngas without traditional mining.
3. Aluminium & Fertilizer Production
With Russia being a major exporter, India is looking to secure long-term fertilizer supplies and aluminium input, essential for food security and infrastructure development.
4. Railway Infrastructure
Joint projects aim at upgrading India’s railway network, leveraging Russian expertise in high-speed rail and automated systems, potentially aligning with India’s ambitious Gati Shakti infrastructure plan.
5. Wind Tunnel Facility for Aerospace
India is planning a modern wind tunnel testing facility with Russian collaboration, a big step for its aerospace R&D capabilities, especially for ISRO and DRDO projects.
6. 3D Printing & Additive Manufacturing
This advanced manufacturing tech could be used in defence, space, and medical applications, helping India reduce costs and manufacturing lead times.
7. Small Aircraft Engine Production
Co-development of engines for small and unmanned aircraft is on the table—key for India’s civilian aviation expansion and UAV programs.
The India-Russia strategic talks weren’t just routine diplomacy—they were a blueprint for technological independence, industrial growth, and a non-Western innovation ecosystem. The outcomes may shape not just bilateral trade but the future of global industrial alliances.
🧩 4. China’s Export Curbs: The Bigger Picture
In late 2024, China imposed strict export controls on rare earth elements such as gallium, germanium, and dysprosium, citing national security. But global analysts see this as a strategic response to increasing Western restrictions on China’s access to advanced semiconductors.
While the spotlight is on the US-China tech rivalry, India is quietly absorbing the shock — especially in sectors like EVs, solar, and electronics.
🇮🇳 Impact on India: A Strategic Wake-Up Call
- 🔧 Automobile chip shortages: India’s automotive industry, still recovering from global chip supply chain issues, now faces added strain. Microchip imports using gallium have slowed, disrupting car and EV production lines.
- 🔋 Rising costs of magnets and batteries: Dysprosium is crucial in permanent magnets used in EVs and wind turbines. Supply cuts have led to 25–30% price hikes, affecting both manufacturers and end-users.
- ⚡ EV & solar project delays: The Ministry of Heavy Industries reported a 12% decline in EV output in Q1 FY25, directly linked to gallium and germanium shortages. Solar panel manufacturing has also slowed, threatening India’s renewable targets.
🔍 Why It Matters
China controls over 90% of global rare earth processing. India’s overdependence makes it vulnerable. These export curbs highlight the urgency for India to:
- 🛠️ Diversify supply chains
- 🧪 Invest in domestic rare earth processing
- 🤝 Strengthen ties with alternative suppliers (like Australia & Russia)
China’s export curbs aren’t just a trade tactic — they’re a geopolitical lever. For India, it’s a critical moment to boost self-reliance in strategic minerals and insulate its clean energy and EV goals from global disruptions.
🇺🇸 5. US Tariffs on Indian Goods: Economic & Strategic Pressure
In a sharp escalation of trade tensions, the United States has slapped an additional 25% ad valorem duty on a range of Indian goods, citing India’s continued oil imports from Russia. This comes on top of existing tariffs, intensifying pressure on one of the world's fastest-growing economies.
🔍 Key Impacts of the US Tariffs on India
- Major export sectors hit: The new tariffs heavily impact textiles, steel, and auto parts — core pillars of India’s manufacturing and export economy.
- Export drop predicted: According to the Global Trade Research Initiative (GTRI), India's exports to the US could fall by 40–50%, severely affecting small and medium enterprises.
- Competitiveness lost: Higher duties mean Indian goods will become costlier in US markets, giving rivals like Vietnam, Mexico, and Bangladesh a competitive edge.
🌐 Double Standards?
What’s striking is the inconsistent application of sanctions. While India is penalized for its Russian oil trade, US allies like the EU and Japan continue energy imports from Russia with minimal or no tariffs. In 2024 alone, China imported $62.6 billion worth of Russian oil — more than India — yet has escaped similar trade restrictions.
🤔 Strategic Message or Economic Bullying?
This move raises critical questions:
- Is this a strategic signal to limit India-Russia ties, especially as India asserts more geopolitical autonomy?
- Or is it economic coercion to realign global supply chains more favorably toward the West?
India must now recalibrate its trade diplomacy, possibly by diversifying exports, deepening ties with ASEAN, and leveraging multilateral forums like BRICS+.
🌐 6. Global Geopolitics of Energy and Minerals
In 2024, the global energy and mineral trade landscape has become a focal point of geopolitical maneuvering, with strategic resources like oil and critical minerals now wielded as tools of economic influence. A quick snapshot of current global trade in Russian oil reveals a telling disparity:
| Country | Russian Oil Imports 2024 | US Tariff Imposed |
|---|---|---|
| China | $62.6 Billion | ❌ No |
| India | $52.7 Billion | ✅ Yes |
| EU | $25.2 Billion | ❌ No |
| USA (Strategic Materials) | $3.3 Billion | ❌ No |
This data underscores a selective application of trade restrictions, with India facing tariffs despite being the world's fastest-growing major economy and a strategic US partner. The move is widely interpreted as a geopolitical signal, cautioning middle powers against deepening energy ties with Russia.
Meanwhile, China continues to import Russian oil without penalties, reinforcing its long-term energy security while avoiding Western backlash. The EU too maintains trade with Russia, prioritizing domestic energy needs over ideological alignment.
India’s penalization highlights the growing economic nationalism in U.S. trade policy — selectively targeting rising regional powers while sparing established global players. In this new world order, critical minerals and energy resources are no longer just commodities — they are geopolitical assets.
As the global clean energy transition accelerates, expect minerals like lithium, cobalt, and rare earths to be the next flashpoints. Countries like India must now diversify supply chains, strengthen bilateral deals, and invest in domestic mining capabilities to maintain strategic autonomy.
⛏️ 7. The Critical Minerals Race: Where India Standl
In the global scramble for critical minerals, India is finally finding its footing. As the world pivots toward clean energy, electric vehicles (EVs), and advanced electronics, the demand for rare earth elements (REEs), lithium, cobalt, and other critical minerals is skyrocketing. Historically dependent on imports—especially from China—India is now making strategic moves to secure its own supply chains.
🇮🇳 Recent Developments:
India has ramped up its global outreach through KABIL (Khanij Bidesh India Ltd), forging mining partnerships in Argentina and Australia for lithium—a key battery metal. Back home, mining leases in Andhra Pradesh are targeting monazite-rich sands, a domestic source of REEs. Meanwhile, the government’s PLI (Production Linked Incentive) schemes for electronics and electric vehicles aim to reduce the nation’s reliance on mineral imports.
However, mining is just one side of the equation. The real bottleneck lies in processing and refining, where India currently lags behind. Raw ores need to be converted into high-purity materials used in batteries, magnets, and semiconductors—an area dominated by China.
This is where India-Russia cooperation becomes vital. Russia’s advanced extraction technologies and willingness to share know-how could help India bridge the critical processing gap. Technology transfer from Moscow, especially in REE purification and battery-grade lithium processing, could make India a serious player in the global supply chain.
India’s strategic shift signals a new era—one where securing critical minerals is no longer optional, but essential to becoming a self-reliant, high-tech economy.
🧠 8. Strategic Benefits of India-Russia Collaborationg
India and Russia have long shared a robust bilateral relationship built on defense, energy, and geopolitical cooperation. In the current global landscape—shaped by shifting alliances, sanctions, and resource insecurity—this partnership is gaining renewed strategic relevance, especially in sectors like rare earth minerals (REEs), energy, and advanced manufacturing.
🔍 Advantages for India
✅ Access to Russian Mineral Processing Expertise
Russia possesses advanced knowledge in mining and mineral refining, especially in critical and rare earth elements. Collaborating with Russian firms allows India to rapidly build its own technological capabilities in REE extraction—critical for green tech, semiconductors, defense, and electric vehicles.
✅ Strategic Bypass of Western Dominated Supply Chains
India currently relies heavily on countries like China for rare earth imports. A partnership with Russia offers a geopolitical workaround, helping India reduce dependence on the Western-centric or China-controlled global supply ecosystem. This aligns with India's "Atmanirbhar Bharat" (self-reliant India) mission.
✅ Foundation for Indigenous Refining Infrastructure
Russia’s support may enable India to establish domestic REE refining plants. By localizing value-added processes, India can transition from raw material importer to global supplier, boosting its economic and strategic clout.
🔍 Advantages for Russia
✅ Sustained Export Routes for Minerals and Oil
With Europe curbing Russian imports due to sanctions, India provides a stable and growing market for Russian oil, natural gas, and minerals. This economic lifeline helps Russia maintain resource revenues while strengthening political ties.
✅ Diversification of Trade Partners
India offers Russia a reliable non-Western trade partner in a multipolar world. Diversifying economic relationships beyond the EU and U.S. reduces Moscow’s vulnerability to sanctions and global market isolation.
✅ Entry into India's Growing Industrial Sectors
Russia can tap into India's rapidly expanding infrastructure and manufacturing sectors. Joint ventures in metallurgy, defense manufacturing, and renewable energy promise long-term returns and strategic influence in South Asia.
The India-Russia collaboration is more than a transactional alliance—it’s a strategic alignment that addresses both countries' long-term economic, technological, and geopolitical goals. As the global order rebalances, this partnership stands to offer stability, innovation, and mutual growth.
🗣️ 9. Expert Opinions & Industry Reactions
India’s push to collaborate with Russia on rare earth minerals has sparked critical commentary across academic, policy, and industrial circles. As global geopolitics tightens, particularly with U.S.-China tensions and emerging protectionist policies, India’s strategic choices are under the spotlight.
📌 Prof. Rajeev Sharma, JNU (Strategic Affairs):
“India has no choice but to diversify away from China for rare earths. Russia offers a pragmatic partner, but execution will be key.”
Prof. Sharma’s statement underscores a widely acknowledged truth—India is overly dependent on Chinese rare earths, which are critical for defense, EVs, and electronics. Collaborating with Russia opens a new chapter in strategic autonomy, but real success hinges on timely execution, technology sharing, and infrastructure development.
📌 GTRI Report:
“U.S. tariffs are less about trade and more about signaling displeasure over India-Russia oil relations. India must balance geoeconomics with pragmatism.”
This insight from the Global Trade Research Initiative (GTRI) highlights the intersection of politics and trade. While rare earths aren’t directly targeted, India’s deepening ties with Russia could attract U.S. scrutiny. Maintaining a neutral yet assertive stance in foreign policy will be vital for India to harness the benefits without alienating key partners.
📌 ACMA (Auto Component Manufacturers Association):
“We’ve seen supply shocks due to Chinese export controls. Unless India builds mineral security, Make in India cannot scale.”
The industry voice is clear—manufacturing cannot thrive without a secure and reliable mineral supply chain. ACMA’s view reinforces the urgency for India to fast-track rare earth exploration, processing, and strategic reserves to make the “Make in India” vision truly self-reliant.
🔮 10. Future Prospects and Recommendations
The growing strategic partnership between India and Russia in the rare earth sector presents vast future opportunities. To maximize long-term benefits, the following actions are recommended to enhance India’s rare earth capabilities while promoting mineral security for the Global South.
1. Establish a Rare Earth Processing Hub in India with Russian Collaboration
India should collaborate closely with Russia to set up a dedicated Rare Earth Processing and Refining Hub. Russia’s vast upstream rare earth reserves and India's rising demand for clean energy technologies create a natural synergy. This hub could be developed under a technology-sharing agreement, enabling India to leapfrog in critical processing technologies currently dominated by China. A Make-in-India model supported by Russian investment and R&D expertise would create jobs, reduce import dependence, and boost exports.
2. Incentivize Domestic Exploration and Private Sector Participation
To ensure a stable and self-sufficient supply chain, India must unlock its domestic rare earth potential. The government should offer policy incentives such as royalty cuts, tax holidays, and fast-track clearances to attract private investors into rare earth mining and exploration. Public-private partnerships (PPP) and collaboration with startups in mineral mapping, AI-driven geological surveys, and environmentally friendly mining can modernize the sector.
3. Push for Global South Alliances (BRICS+) for Collective Mineral Security
India should lead a BRICS+ initiative for mineral diplomacy, focusing on rare earth and strategic mineral cooperation among the Global South. This alliance could include countries like Brazil, South Africa, and Indonesia, all rich in rare earths. A joint rare earth stockpile, knowledge exchange on sustainable mining, and coordinated policies on export and pricing can counter Western and Chinese monopolies and create a multipolar mineral world order.
4. Strengthen Trade with ASEAN and African Mineral-Rich Nations
India must diversify its rare earth import sources by deepening bilateral trade ties with ASEAN countries (like Vietnam and Malaysia) and African nations (like Namibia and Madagascar). Strategic agreements for long-term supply contracts, exploration partnerships, and joint ventures can ensure resilience against supply chain shocks. India’s development-centric approach makes it a trusted partner for resource-rich developing countries.
✅ 11. Conclusion
India’s collaboration with Russia on rare earth mineral extraction marks a decisive step toward strengthening its strategic autonomy and securing its industrial future. As global powers like the U.S. and China tighten control over critical mineral supply chains, India must carve its path by forging resilient partnerships that prioritize long-term self-reliance. Russia, with its vast rare earth reserves and existing technological capabilities, emerges as a natural partner in this geopolitical equation.
This alliance is not just about resource acquisition—it’s about ensuring that India can power its electric vehicles, defense systems, and green technologies without being vulnerable to global supply shocks. While the challenges are complex—from navigating sanctions to infrastructure bottlenecks—the opportunity is equally significant. India must now accelerate exploration, invest in processing infrastructure, and finalize bilateral frameworks to turn intent into action.
In a world where economic power is increasingly defined by control over critical resources, India’s pursuit of mineral independence through strategic cooperation with Russia signals both foresight and ambition. With the right policy support and execution, this partnership can reshape India’s industrial landscape and secure its place in the future of global manufacturing and clean energy.
❓ 12. FAQs
Q1. Why are rare earth minerals important for India?
Rare earths are essential for EVs, renewable energy, and defense applications. India lacks processing infrastructure and depends heavily on China.
Q2. What was the outcome of the India-Russia meeting?
They agreed to explore cooperation in rare earth extraction, aerospace, and industrial tech — signaling a deeper strategic partnership.
Q3. Why did the US impose new tariffs on India?
The US cited India’s continued oil imports from Russia amidst the Ukraine conflict, imposing 25% additional tariffs on key goods.
Q4. How is China affecting the global supply of rare earths?
China has restricted exports of several critical minerals, affecting industries globally. It controls over 85% of rare earth production.
Q5. What should India do to become self-reliant in rare earths?
Invest in exploration, build processing plants, partner with friendly nations like Russia, and implement supportive mining policies.
📚 Reference
-
Ministry of Commerce and Industry, Government of India.
“India, Russia Discuss Industrial Cooperation in Rare Earth and Critical Mineral Extraction.” Press Information Bureau, 7 Aug. 2025, https://pib.gov.in/. -
United States Geological Survey (USGS).
“Mineral Commodity Summaries 2024: Rare Earths.” USGS, Jan. 2024, https://pubs.usgs.gov/periodicals/mcs2024/mcs2024-rare-earths.pdf. -
Global Trade Research Initiative (GTRI).
“US Tariffs and Strategic Trade Pressure on India: 2024-2025.” GTRI Reports, July 2025, https://gtrinitiative.org. -
The Indian Express.
“Explained: Why Rare Earth Elements Are Crucial and India Must Secure Supply Chains.” The Indian Express, 8 Aug. 2025, https://indianexpress.com/article/explained/explained-sci-tech/explained-rare-earth-elements-india-global-alliance-supply-8070563/. -
White House.
“Statement on Tariffs Against India under Section 232.” The White House Briefing Room, 7 Aug. 2025, https://www.whitehouse.gov. -
ACMA (Automotive Component Manufacturers Association of India).
“Impact of Chinese Rare Earth Export Curbs on Indian Auto Sector.” ACMA Industry Reports, June 2025, https://acma.in. -
Khanij Bidesh India Ltd. (KABIL).
“Annual Report 2024–25: Indian Investment in Global Critical Minerals.” KABIL, 2025, https://kabil.gov.in. -
European Union Trade Statistics.
“EU-Russia Trade Volume 2024.” Eurostat, May 2025, https://ec.europa.eu/eurostat. -
Prof. Rajeev Sharma.
Interview. Centre for Strategic and International Studies, Jawaharlal Nehru University, Aug. 2025.
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