During the final day of the 18th BRICS Summit held in New Delhi, Prime Minister Narendra Modi raised significant concerns regarding the use of technology and critical minerals in the global landscape. In a statement that's being viewed as a direct message to China, the Prime Minister emphasized that critical minerals shouldn't be used as a weapon. This remark was made during an open session of the summit, where Chinese President Xi Jinping was also present. Although the Prime Minister didn't explicitly name any specific country, the context of global supply chains and China's dominance in the rare earth sector made the target of the statement clear to international observers.
The Geopolitical Context of the Statement
The Prime Minister's comments come at a time of heightened global geopolitical tension. While US President Donald Trump has impacted the global economy with his tariff policies, China has been asserting its influence through its control over rare earth elements. The discussion on critical minerals at the BRICS 2026 summit followed the New Delhi Declaration 2026, which had already addressed opposition to trade tariffs. The fact that PM Modi chose to speak on the weaponization of minerals while sitting next to President Xi Jinping highlights the strategic importance India attaches to this issue. The core of the concern lies in how essential these minerals are for modern technology and the extent of China's grip on the entire supply chain.
China's Massive Rare Earth Reserves and Production Power
According to data from the United States Geological Survey (USGS), China holds approximately 44 million metric tons of Rare Earth Oxide (REO) reserves. To put this in perspective, Brazil holds about 21 million tons. China's primary rare earth resources are concentrated in regions such as Bayan Obo in Inner Mongolia, Ganzhou in Jiangxi, and Liangshan in Sichuan. However, China's strategic advantage isn't merely limited to its mineral reserves, while its true strength lies in the post-mining stages, including processing, refining, and the manufacturing of high-performance magnets.
Dominance in the Global Value Chain
The International Energy Agency (IEA) reported that in 2024, China accounted for nearly 60 percent of global mining production for magnet rare earths. Its dominance becomes even more pronounced in the later stages of the value chain, with a 91 percent share in refined output and a staggering 94 percent share in the production of sintered permanent magnets. This indicates that even if other countries engage in rare earth mining, the capacity to convert these minerals into high-quality industrial products and high-performance permanent magnets remains largely concentrated within China.
China's Export Controls and Licensing Systems
In recent times, China has tightened its grip by implementing export controls on rare earths and their associated supply chains. In April 2025, China introduced a licensing system for the export of seven medium and heavy rare earth elements, including Samarium, Gadolinium, Terbium, Dysprosium, Lutetium, Scandium, and Yttrium. By October 2025, the scope of these controls was further expanded to include products manufactured outside China if they utilized rare earths of Chinese origin. Although the expanded measures from October 2025 were later suspended until November 10, 2026, the original licensing system from April 2025 remains in effect. 9 percent increase from the previous year. Plus, in January and February 2026, exports grew by 23 percent on an annual basis, showing that while China has strengthened its control framework, it continues to play a central role in the global supply chain.
India's Strategic Dependency on Chinese Imports
For India, the issue of rare earths isn't just a matter of diplomacy but is deeply tied to industrial and strategic security. India's reliance on China for permanent magnet imports is exceptionally high. Government data for the financial year 2024-25 indicates that China's share in the permanent magnet category ranged between 85 and 90 percent by quantity. Some industry estimates suggest this dependency could be as high as 93 percent. In FY2024-25, India imported approximately 53,700 tons of permanent magnets, a significant increase from the previous fiscal year. Any disruption in the supply of these magnets from China could severely impact India's automobile, electronics, and other manufacturing sectors.
The Critical Role of Rare Earth Magnets
Rare earth magnets are indispensable for modern technology, used in electric vehicle (EV) motors, wind turbines, industrial motors, and various high-tech systems. Neodymium-Iron-Boron (NdFeB) magnets are particularly vital due to their high strength and compact size. Heavy rare earth elements like Dysprosium and Terbium are often added to enhance performance at high temperatures. In the defense sector, rare earth-based technologies are used in advanced systems such as sensors, radar, electronic systems, and precision technology. So, a supply disruption isn't just an industrial problem but a threat to energy transition and national security.
Challenges Beyond Mining for India
India faces a multi-level challenge that goes beyond just increasing domestic mining. The rare earth value chain involves several complex steps: mining, separation, refining, alloy production, and magnet manufacturing. To reduce dependency, India is working on domestic capacity building and seeking critical mineral cooperation with countries like the United States and Australia. Efforts are also being made to secure mineral resources abroad and develop recycling infrastructure. 4 GWh of capacity had become operational by October 2025, against the government's targeted goals. Ultimately, India's diplomatic efforts to secure supply chains will only be effective if domestic processing and manufacturing capabilities are scaled up rapidly to counter China's existing dominance.