A US-led critical minerals alliance presents India with opportunities as well as challenges

The presence of key stakeholders, including India, Japan, Australia and the Democratic Republic of Congo, reflected a growing recognition that access to critical minerals such as lithium, cobalt, rare-earth elements and graphite is no longer merely an economic concern but a strategic imperative.

At its core, the meeting was a response to the structural vulnerabilities embedded in global supply chains, particularly the overwhelming dominance of China in mining, processing and refining critical minerals. Beijing’s control of more than 60% of rare-earth production and its recent willingness to weaponize export restrictions on minerals such as gallium and germanium have sharpened anxieties in Washington and allied capitals.

The Trump administration’s framing of this challenge—as a strategic liability comparable to the influence of the Organization of the Petroleum Exporting Countries over oil markets, but with far greater implications for high-tech, clean energy and defence sectors—reveals how deeply resource geopolitics is now intertwined with great-power competition.

The ministerial thus reflected a realist recalibration of economic policy. Markets, left to themselves, have produced outcomes that favour scale, subsidies and state action, areas where China enjoys significant advantages. As Vance argued, the flooding of global markets with cheap Chinese minerals has hollowed out domestic production elsewhere, creating dependencies that are politically and strategically untenable.

Against the backdrop of rising US-China tensions and surging global demand—particularly for lithium—the meeting sought to mobilize collective action around diversification, ‘friend-shoring’ and supply-chain resilience.

Its outcomes were indicative of this shift. The announcement of a $10 billion US Strategic Critical Minerals Reserve under Project Vault signalled Washington’s intent to treat minerals as strategic assets rather than just commodities.

Proposals for preferential trade arrangements among allied states, including tariffs and price-stabilization mechanisms, point to a more heavily managed economic order, one that blends protectionist instincts with selective multilateralism. A proliferation of bilateral and plurilateral agreements, including new frameworks with the EU, Japan and several emerging economies, further reinforced the momentum towards an allied ecosystem for mineral security.

For India, the implications are particularly significant. Represented by external affairs minister S. Jaishankar, New Delhi positioned itself as a key partner in efforts to mitigate risks arising from excessive supply-chain concentration.

India’s endorsement of initiatives such as the Forum on Resource, Geostrategic Engagement (Forge) aligns well with its own National Critical Minerals Mission, which seeks to reduce dependence on imports, especially from China, by expanding domestic exploration, processing and international partnerships.

Given that India currently relies on China for the bulk of its critical mineral imports, especially for electric vehicles and renewable-energy technologies, the strategic logic of diversification is clearly compelling.

Closer US-India cooperation in this domain also dovetails with broader strategic convergence. Jaishankar’s engagements with senior US officials, coupled with recent trade and tariff adjustments, indicate a growing political will to deepen collaboration on technology transfer, joint ventures and investment in mining and refining capacities.

India’s untapped reserves—from lithium in Jammu and Kashmir to rare earths in Kerala—offer new opportunities, but only if matched by capital investment, regulatory clarity and environmental safeguards. As a manufacturing hub, India could integrate into allied blocs, reducing vulnerabilities and enhancing its Quad role (with the US, Japan and Australia) on mineral security.

Yet, India’s choices are not without constraints. Limited processing capacity, long project gestation periods and ecological sensitivities could slow progress. More importantly, an overt alignment with US-led mineral blocs carries geopolitical risks, particularly given India’s complex relationship with China, its largest trade partner and a persistent security challenge. Managing this balance between strategic autonomy and strategic alignment will test India’s diplomatic agility.

Ultimately, the 2026 Critical Minerals Ministerial meeting highlights how the global political economy is being reshaped by resource nationalism and strategic competition. For India, it presents both an opportunity to enhance self-reliance and a challenge to navigate an increasingly fragmented order.

Whether this emerging framework delivers genuine resilience or merely reconfigures dependencies will depend on implementation, inclusivity and the ability of participant states to reconcile security imperatives with their goals of sustainable development.

The author is professor of international relations, King’s College London, and vice president for studies at Observer Research Foundation, New Delhi.