The summit bought a year of time to combat China’s rare earth dominance. India is best positioned to take advantage.
The summit between U.S. President Donald Trump and Chinese President Xi Jinping at APEC in Gyeongju produced no grand bargain but one valuable by-product: time. China agreed to delay for one year the latest round of rare‐earth export controls, which Washington feared could strangle defense, clean energy and semiconductor supply chains overnight.
Markets cheered what they saw as a “truce.” But the pause only underscores how precarious global dependence on China remains – and how urgently the world must diversify.
For the past decade, China has maintained a near-monopoly over the rare earth elements that make the modern economy run. It controls roughly 70 percent of global mining, over 90 percent of refining, and almost the entire production of high-performance magnets essential to electric vehicles, wind turbines, and precision-guided munitions. Each time geopolitical tension spikes, Beijing’s ability to weaponize this dominance becomes obvious. Even a temporary export delay shakes entire industries from Detroit to Düsseldorf.
The one-year reprieve is therefore a window of opportunity for the United States and its allies to act. The question is who can move fastest to build credible alternatives. Increasingly, that answer may be India.
New Delhi has long possessed the geological ingredients. India’s beach-sand deposits contain rich reserves of monazite, bastnaesite, and other rare-earth minerals, but the country’s processing capacity and environmental rules have lagged. That is now changing.
In June, India announced that it is negotiating with companies and planning a fiscal incentive scheme for domestic rare-earth magnet manufacturing, aimed at reducing reliance on China. Indian companies such as Sona Comstar, already a key global supplier for EV drivetrains, are setting up magnet production lines. State-owned Indian Rare Earths Ltd. has been tasked with expanding refining capability, and the Indian Space Research Organization is helping adapt high-purity separation technology initially designed for satellite components.
Even more significantly, India is linking these domestic moves to strategic partnerships abroad. Talks with the United States, Japan, and Australia under the Quad framework have accelerated joint exploration, co-financing and technology-transfer projects.
Unlike many other new entrants to the rare earths race, India brings both scale and credibility. It is the world’s fifth-largest economy, a trusted U.S. partner, and a country already central to global semiconductor, defense, and clean energy supply chain planning. Its manufacturing base is large enough to absorb downstream industries – magnets, motors, batteries – that smaller rare earth producers like Australia or Brazil cannot fully host.
With strong political will and a growing technological ecosystem, India could soon emerge as the third pillar – alongside the United States and Japan – of a democratic rare-earth network.
That is not to discount other contenders. Australia remains indispensable for mining and early‐stage processing; its Arafura and Lynas projects are years ahead. Brazil’s Serra Verde mine, which began initial shipments last year, brings much-needed Western Hemisphere diversification. The United States has made progress too: MP Materials has started producing neodymium-praseodymium (NdPr) metal in California and magnets in Texas. Yet the economics of these ventures depend heavily on long-term offtake agreements and subsidies. None of these countries alone can offset China’s dominance.
India, however, changes the calculus by linking supply diversification with market demand. It can consume what it produces, export what it refines, and – if integrated with allied partners – become a hub for both production and processing. India’s strategy is also less vulnerable to short-term political reversals; rare earth self-reliance fits neatly within Prime Minister Narendra Modi’s broader “Atmanirbhar Bharat” (self-reliant India) agenda, which enjoys bipartisan support.
To seize the moment, Washington should treat India not just as a partner in defense or semiconductors but as a cornerstone of a new “rare earth alignment.” That means several practical steps.
First, the United States should explore co-financing magnet plants in India through U.S. International Development Finance Corporation loans or EXIM guarantees, ensuring that new facilities meet global environmental and labor standards.
India and the U.S. can also establish reciprocal stockpiles – a small but symbolically important move to demonstrate trust and create price stability. Fast-tracking technology sharing on refining and waste treatment will allow India to leap-frog costly trial-and-error phases that slowed the United States and Australia.
Finally, rare earth cooperation should be embedded into the Quad’s core agenda, making it as central as joint naval exercises or semiconductor collaboration.
Critics will argue that India’s governance challenges – bureaucratic inertia, environmental opposition, and slow licensing – could derail its ambitions. Those risks are real, but they are also overstated. India’s recent success in attracting high-tech manufacturing, from Apple assembly lines to chip design centers, shows it can deliver when strategic alignment and financial incentives converge.
The coming year will test whether the China-U.S. “rare earth truce” holds, but time favors those who act. If China uses the next 12 months to tighten control while others hesitate, the world will emerge more dependent than before. If instead the United States, Japan, Australia, and Brazil rally behind India’s rise as a credible supplier and processor, they can lay the foundation for a truly pluralistic rare-earth market – and with it, greater geopolitical resilience.
The Trump-Xi summit bought breathing space. India now offers a path to breathe freely.