The Geopolitics Of Rare Earths: Strengthening India-U.S.A. Cooperation

Policy Update
Ameya Satam

Introduction:

China’s growing dominance in the rare earth sector has heightened tensions in the global supply chain security of the world. The constant dependency on China for rare earths is raising critical vulnerabilities regarding market monopolization. To break this constant cycle of dependency, the U.S.A. has brought the Pax Silica initiative, which would dismantle this dependency while, at the same time, it will also achieve the U.S.A.’s core goals of AI and supply chain security, along with advancing new economic security through agreements between the allies and trusted partners.

Till now, 14 countries have been signatories of this Pax Silica initiative, and India has become one of them after signing it on 20 Feb 2026 during the AI Impact Summit in New Delhi. The Pax Silica is strengthening the engagement of India and the U.S.A. in the fields of critical technologies and supply chain resilience. However, securing the supply of critical minerals and rare earths is also necessary for producing critical technologies and building technologies necessary for the AI era.

To secure the supply of Critical Minerals and Rare Earths, the Framework on “Securing of Supply in the Mining and Processing of Critical Minerals and Rare Earths” was signed between India and the U.S.A. during the visit of U.S.A. Secretary of State Marco Rubio in India on 26 May 2026 (Ministry of External Affairs, 2026). This framework allows India & U.S.A. to strengthen their cooperation in the areas of critical minerals and rare earths supply chain through mining, processing, recycling and related investments. This framework fulfills the shared strategic priority of both countries through securing the supply chains of critical minerals for emerging technologies and high-tech manufacturing.

Along with the Pax Silica, India and the U.S.A. are also part of the Forum on Resource Geostrategic Engagement (FORGE) initiative, where this framework is also applicable. FORGE is another Mineral Security Partnership (MSP) which will generate the opportunity for long-term planning, maintain the prices of critical minerals, pull private investments, create job opportunities and lower the strategic dependence (Baskaran & Schwartz, 2026). A total of 17 countries are part of this initiative (Baskaran & Schwartz, 2026).

Importance:

China’s Dominance

The timing of the signing of the new framework is important to note, as the world is already going through an energy crisis due to the ongoing tensions in West Asia, so the global transition is moving towards renewable energy, a sector that is greatly dependent on the constant supply of critical minerals and rare earths. China’s dominance in the supply of rare earths and critical minerals has become a cause for concern among Western countries and their partners.

Whoever controls the supply chains of the rare earths and critical minerals also indirectly controls the development of advanced technologies and AI. The U.S.A. and India are also heavily dependent on China’s production of critical minerals and rare earths, to reduce their reliance on China has become a main focus. This will restrict them from creating defence systems, semiconductors, electric vehicles and energy technologies.

India’s Resource Base & Industrial Capacity

For the U.S.A., India brings brilliant technology, manufacturing potential, an untapped amount of critical minerals and rare earths. Along with these factors, the critical mineral production ability also increases, and moreover, India offers the U.S.A. a relationship built on strategic trust, geopolitical alignment, and rigorous supply-chain reliability. India has over 30 critical minerals, which are recognized officially (Raj, 2026). According to the Indian government data, India has around 13 million tonnes of monazite, which is a phosphate mineral comprising rare earth elements.

India is one of the world’s biggest coal economies. Mining processes are carried out on a large scale, which produces a lot of mining waste, discarded coal material, and polluted water. These drawbacks of the mining process can be harmful for both the local communities and the companies. Around 170 million tonnes of mining waste are produced in India. Jharkhand and Odisha, like states, have the largest mining waste deposits in India. However, the collaboration with the American companies can create an advantage in these issues as various universities, national laboratories, and private firms of the U.S.A. are developing technologies to retrieve rare earth elements and other critical minerals from coal ash, mine waste, and related byproducts.

The U.S.A.’s Department of Energy (DOE) has also approved funds of about $135 million for supporting the small-scale projects, which are commercially profitable in extracting rare earth elements and critical minerals from mine dregs and related waste materials (Pai & Phillips, 2026). Similarly, India’s Ministry of Mines has also declared a new tailings policy in which the new guidelines will ensure the exploration and recovery of critical minerals from mine dumps and legacy waste streams. To evaluate the commercial viability of waste streams, U.S.A. scientists and Indian institutions are collaboratively working on sample analysis, collection procedures, and beneficiation methods.

The benefit of this combined partnership is that the U.S.A. is strong in the technical expertise and research field, while India is strong in the fields of industrial production capacity, raw material, and mining infrastructure. This generates an opportunity for the technology transfer, as there has been a mining waste issue for decades, which will be solved if Indian firms adopt these technologies of recovering rare earth elements and other critical minerals from the mine waste. Such adoption of technologies may require less investment because the need for land exploration for new mines will reduce. As a result, the displacement of people due to air pollution from mining will not occur, and environmental damage will be restricted.

To increase the domestic production of the rare earths and critical minerals, India’s 2026-2027 budget has created plans for “rare earth corridors” in Odisha, Kerala, Andhra Pradesh and Tamil Nadu. Mining, refining, research and manufacturing of high-performance rare earth magnets that are used in clean energy technologies and electric vehicles are going to be the main focus in these corridors (Raj, 2026).

U.S.A.’s Capabilities

Till now, the U.S.A. government has funded projects with more than $30 billion through letters of interest, investments and loans across the world (U.S. Embassy & Consulates in India, 2026). It is also supporting the private sector of the U.S.A. for partnerships. These efforts by the U.S.A. are going to produce billions of dollars through new projects. All these steps taken by the U.S.A. are well-planned from the perspective of national security and economic competition.

The signing of the recent framework is a strong sign of the U.S.A. seeing India as a significant partner in the critical minerals sector. This framework reduces the reliance of both countries on other countries. Indian firms are continuously seeking processing technologies in foreign countries, as they lag behind in critical minerals processing technologies. This framework can facilitate technology transfer to Indian firms through American firms.

The U.S.A. government has funded $1.4 billion to Vulcan Elements to build a magnet manufacturing unit, which will be one of the largest magnet manufacturing units located outside China (Pai & Phillips, 2026). It aims to produce around 10,000 metric tonnes of annual magnet capacity (Pai & Phillips, 2026). If Indian firms get a chance to collaborate with such companies in big projects like this, then it will create a way for India to receive technology transfer. This project will compete with China as it will be one of the largest magnet manufacturing units.

Investments from American firms in India will help India’s economy to grow as the framework allows. The framework also encourages integration of companies in the emerging strategic industries, which may benefit India in the renewable energy sector, electric vehicle sector, AI, and advanced materials, etc.

Challenges:

In the Lithium, cobalt, and other critical mineral processing sector, China is dominant if compared to the U.S.A. and India, as China has the capability of refining around 85% of the critical minerals if measured on the global scale (Pai & Phillips, 2026). This capability of China creates a challenge for India and the U.S.A. in economic security and national security.

At present, India has limited potential in processing its own domestically produced rare earth materials. According to the US International Trade Administration, India is currently only supplying four critical minerals: copper, graphite, phosphorous and titanium. Due to gaps in infrastructure, processing technology and large-scale exploration, India is currently struggling in the critical minerals and rare earths sector.

Rapidly, filling these gaps is necessary to become self-reliant in this sector, and the bilateral framework represents a timely mechanism to bridge these technical gaps, which may help India only if it is executed without any delays, or else the reliance on China will continue. Both countries, India and the U.S.A., lack the talented people in the specialized fields that are necessary for building the critical mineral value chains.

Fig no.1.1: Strategic bottleneck: India and the USA remain heavily reliant on China for rare earth imports. Sources of Data: The Motley Fool Research; Open The Magazine Strategic Analysis. Chart generated by the author using Microsoft Power BI software.

The level of upper hand China has in the critical minerals processing is unmatchable for India and the U.S.A. for the present time, and to compete with China, it may take a long period to create new supply chains. Maintaining positive ties with China is a challenge for both countries as they will remain dependent on rare earths and critical minerals, at least for some years till they develop a successful supply chain through focusing on increasing their domestic production capacities.

Till a strong supply chain forms, both countries should manage strategic vulnerabilities during the transition period. The U.S.A. and India should also maintain their ties with each other without creating strains through public diplomatic friction or unilateral tariff disputes.

Joint ventures of India and the U.S.A. will bring investments, but they may also create environmental problems, which would impact India if these projects target India as a raw material source. While mining in India, the Indian government should keep a close watch over the effects of mining on the environment as well as on locals.

Air pollution issues have been seen in Odisha, which are proven to cause diseases like asthma, bronchitis, etc. The dust that is removed during mining spreads into the nearby local areas, which makes the air polluted. Plus, the labourers in the mining area don’t get proper safety gear and protective equipment, which affects their health for a long time. Landslide-like disasters also cause the death of these labourers. So, the government should try to minimize the side effects of mining.

Conclusion:

Signing the framework declares the agreement on paper, but taking firm steps towards actually executing the actions is necessary for successful outcomes of the framework. However, the engineering and scientific workforce of India is one of the largest in the world, but it still lacks the required particular proficiency in the field of mineral processing, beneficiation technology, and mine-site restoration.

In these fields, it is expected that the experts from the U.S.A. may train the Indian workforce in achieving the required proficiency. America has also supported major mining projects in Pakistan and South Africa; similarly, Indian mining projects can get support. Finding an option for China is the main topic, and prioritising to create its own supply chains is beneficial for both countries.

Quick investments in the mining projects by both countries will help them to start building the infrastructure necessary for mineral processing, and it will strengthen the supply chains of rare earths. Swift intervention to start projects will boost the speed of both countries in securing their supply chains in future. American investments are important in India, as India faces a significant disadvantage in infrastructure, processing technology and large-scale exploration compared to China or the U.S.A. Strengthening these areas of India and America, both can together compete with China in the near future.

If America and India cooperate in the critical minerals and rare earths sector, then it will be possible for both countries to reshape the future of the global supply chain for advanced technologies and AI, while positioning the alliance as a viable alternative for third-party nations seeking reliable supply chains independent of China. Delays in action by India and the U.S.A. will indirectly benefit China, as most of the supplies of rare earths are already controlled by China. The delays will also help China to dominate in AI and other advanced technologies. China may even go ahead in those fields, while India and the U.S.A. keep moving at a turtle’s speed in securing supply chains.

Local environmental issues caused by mining can be reduced through the proper usage of new techniques and technologies. For example, the use of mobile water sprinklers can settle down the dust that is being carried away by the air. Furthermore, control blasting techniques can be used through proper delay detonators and explosives, which will limit the damage to the land, and less dust will be generated, and ground vibration will also be under control. Sustainable mining practices and occupational safety guidelines should be added directly into the joint U.S.-India sample analysis and beneficiation pilot programs.

References:

Pai, S., & Phillips, J. (2026, May 28). Roadmap for how United States-India critical minerals framework can deliver results. Outlook Business. https://www.outlookbusiness.com/economy-and-policy/roadmap-for-how-united-states-india-critical-minerals-framework-can-deliver-results
U.S. Embassy & Consulates in India. (2026, May 26). United States and India sign strategic critical minerals cooperation framework. U.S. Department of State. https://in.usembassy.gov/united-states-and-india-sign-strategic-critical-minerals-cooperation-framework/
Ministry of External Affairs. (2026, May 26). India-US Framework on “Securing of Supply in the Mining and Processing of Critical Minerals and Rare Earths” [Press release]. Government of India. https://www.mea.gov.in/press-releases.htm?dtl/41236/IndiaUS_Framework_on_Securing_of_Supply_in_the_Mining_and_Processing_of_Critical_Minerals_and_Rare_Earths
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About the Contributor

Ameya Satam is a Research & Editorial Intern at IMPRI specializing in International Relations and Strategic Studies. He completed his post-graduation in International Relations at Sikkim University, focusing on Indo-Pacific geopolitics and India–US cooperation, and is dedicated to analyzing regional security frameworks to inform evidence-based policy discourse.