Mint Explainer | Why India’s rare earth deal with Brazil matters after Pax Silica

The South American country has the second-largest source of rare earth and other critical mineral ores after China.

Mint explains the development that comes a day after India formally joined the US-led alliance for the critical mineral global supply chain Pax Silica. Brazil is not a part of the alliance.

What are rare earths and critical minerals?

There are 17 rare-earth elements, including samarium, dysprosium, and neodymium, which are metallic. Simultaneously, there are minerals notified by the government to be critical minerals, essential in India’s growth journey and energy transition.

Simply put, it is difficult to engage in advanced manufacturing and make electric vehicles and their batteries, solar panels, wind turbines and even semiconductors without rare earth elements and critical minerals.

In 2023, India identified a list of critical minerals, including copper, cobalt, bismuth, graphite, lithium and rare earth elements.

How big is India’s stockpile?

India has a fairly large supply of rare-earth ores. According to the US government’s Mineral Commodity Survey 2025, India has the third-largest rare earth reserves (6.9 million tonnes) in the world after China (44 million tonnes) and Brazil (21 million tonnes).

India, however, lags in processing capacity, 90% of which is controlled by China. This vulnerability led to panic among Indian manufacturers in the wake of a rare-earth magnet export halt by China in April last year.

India also has reserves of critical minerals, such as lithium, but it is still largely dependent on imports to meet local demand. China, meanwhile, is also the world’s biggest processor of critical minerals such as copper, lithium, cobalt, and graphite, according to a December 2025 report on self-reliance in critical minerals by the parliamentary standing committee on coal, mines, and steel (2025-26).

What does Pax Silica, and now a pact with Brazil for critical minerals, mean for India?

According to domain experts, it means diversifying sources. Making technologies essential for India’s energy transition becomes difficult without these critical minerals.

For India to grow its manufacturing, it is essential that it is not vulnerable to access to technology or risks supply chain disruption and has access to raw material at competitive prices, said Rajnish Gupta, partner, tax and economic policy group, EY India.

“It should protect itself from market failure resulting in concentration in any part of the supply chain with any one country. Supply chains of emerging manufacturing, like semiconductors or materials relating to the green transition, are inherently intricate and interdependent,” he said.

Building full-spectrum resilience across mining, processing and manufacturing would be difficult for any single economy acting alone. “By signing this agreement, India can eliminate potential choke points and ensure access to advanced technologies and potential investments,” he said on India joining Pax Silica.”

Only a day after India joined Pax Silica, it announced a strategic collaboration with Brazil. Spokesperson for the ministry of external affairs Randhir Jaiswal said on social media platform X that New Delhi’s agreement with Brasilia for cooperation in the field of critical minerals and rare earths could increase technology transfers, exploration, and R&D in this sector, and can act as a magnet for investments, with India likely to benefit from Brazil’s experience in processing and recycling technologies.

What is the foundation of India’s strategy?

For this, we need to look no further than the latest Economic Survey for FY26, which proposed a change in India’s manufacturing policy, calling for ‘strategic resilience’ over ‘complete self-reliance’.

The survey called for India to position itself as a crucial part of global value chains, to become resilient to supply chain disruptions and economic uncertainty, instead of aiming to build every part of the value chain in-house.

Pax Silica also has a crucial formula in which member nations will each play to their strengths. Each nation is expected to contribute “distinct strengths” across domains ranging from critical minerals and advanced manufacturing to semiconductor capability, AI innovation and deep industrial ecosystems, according to the US government.

For instance, Australia has the unique position of being the world’s largest lithium producer, accounting for about half of global supply of the critical mineral used in batteries in 2023, according to OECD data.