Today, the narrative of rare earths entangles global trade wars, India’s aspirations to manufacture products, and an unexpected development from Afghanistan. A narrative that includes resource extraction, strategizing, and shifting alliances; minerals have become the new landmark of global influence.
China’s strategic offer to India
Recently, China agreed to restart rare earth shipments to India, albeit with one condition that – New Delhi must sign an affirmation that the rare earths would not be reshipped or diverted to the United States. This condition turns what could be considered a normal trade decision into a decisive geopolitical act. In effect, China is stating, “We’ll provide to India, but not one single gram should end up in America.” The request is not a new practice with respect to form. India already issues end-user certificates to specific countries, stating that imported commodities will not be used for weapons of mass destruction. However, now the solicitation constitutes an explicit declaration targeted toward the U.S., and made clearer as U.S.-China trade tensions rise. Rare earths are essential for contemporary technology. From electric vehicles, wind turbines, and smartphones to radar and missiles, these materials are at the core of the current economy. For India, which is pushing hard on its EV and defense manufacturing, access to rare earths is important. However, China’s new demand puts India in a difficult position of being able to balance its economic need with its strategic alignment.
U.S.- China Trade War Context
This action from Beijing must be understood in terms of the ongoing U.S.-China trade war. The U.S. has provoked a steep tariff regime on Chinese goods, and in retaliation, China is now rationalizing its monopoly on rare earths is a weapon of economic warfare. The U.S. restrictions have forced China to double down in attempts to limit American industries from obtaining Chinese materials indirectly, including through third countries, such as India.
Beijing’s provision is aimed at closing this gap. It’s a response to what occurred with Russian oil, where the West originally banned Russian imports but then still received refined product from India. Beijing is trying to prevent the same situation for rare earths. It will preserve its position in the global supply chain and offer the appearance of being cooperative with India.
The Strategic Dilemma for India
For India, the decision is more nuanced. Agreeing to China’s requirements could bring backlash from Western allies, especially considering India’s role in the U.S.-led Mineral Security Partnership (MSP), which promotes reduced dependency on Chinese minerals on a global scale. Ultimately, rejecting China’s terms would slow India’s green energy and defense sectors.
Considering this, India has implemented a two-pronged approach: resilience in the short term and self-reliance in the long term. In the interim, India has maintained the importation of its rare earths under its existing end-user certificates while not formally agreeing to the contract’s anti-diversion clauses. In the long term, the Indian government has authorized a ₹7,300 crore project to build the domestic magnet industry, created a national stockpile of critical minerals, and issued its company, KABIL India, a mandate to obtain rights to minerals in foreign countries rich in reserves.
Surprising Offer from Afghanistan
Amidst this geopolitical chessboard, it was surprising to receive an offer from Afghanistan. Afghan Foreign Minister Amir Khan Muttaqi was in New Delhi to offer India an opportunity to invest in Afghanistan’s rich resources, particularly its untapped rare earths and lithium resources. He even went so far as to ask India to open the Wagah border route through Pakistan to facilitate trade.
For the Taliban regime, such an invitation has both an economic and political consequence. The regime needs foreign investment and ultimately legitimacy as a government in the international realm. In contrast to China or the West, India has a long tradition of engaging in Afghanistan through development-related projects, including building schools, hospitals, roads, and even the Parliament building.
Though China said it would invest in the lithium sector of Afghanistan, much has yet to happen. Taliban leaders are also uncomfortable with Chinese dominance and proximity to Pakistan. Western countries have frozen Afghanistan’s funds and have refused to interact with the Taliban formally. Considering this, India is emerging as a path forward a trustworthy, non-intrusive partner.
The Bigger Picture: Minerals as the New Oil
Exports of rare earths from China, India’s ability to mediate, and Afghanistan’s outreach aren’t just isolated events they’re part of a larger global trend where minerals are the new oil the building blocks of the digital and green revolutions. The future technologies that will dominate our lives will be dependent upon control of lithium, cobalt, and rare earths: EVs, semiconductors, renewable energy systems, and defense systems.
For India, minerals represent both a challenge and an opportunity. China offers quick access to resources at a lower cost, but engaging with a variety of countries, such as Afghanistan, offers the prospect of long-term security and independence. Developing domestic capabilities would significantly reduce risks of supply disruption and vulnerability to securities conditioning.
The Path Forward
India’s current demand for rare earth elements is around 4,000 tons annually and it’s set to double by 2030. Meeting this demand in a sustainable way involves marrying diplomacy and strategic vision. By careful engagement with China, while avoiding alienating the West, while exploring Afghan mineral opportunities, India can advance its case as a key player in the global supply chain.
China’s offer is thus more than a simple trade arrangement it’s a geopolitical maneuver designed to slow India’s progress deeper into U.S. relations and to create an “Afghan mineral axis” that could actively challenge China’s supremacy. If India is careful and deliberate, it could harness an alliance with China for its supplies of rare earth materials plus access to Afghan materials in its broader resources eco-system to drive its manufacturing revolution.
In the end, this is not fundamentally about rare earths; it is about who controls the components of the modern world. And in the race, India is in an important, almost flipping point situated between old powers but emerging a as a new power as well. Afghanistan was once a target of war but may soon became the battlefield not for land, but for the minerals that would define in the global power dynamic moving forward.
