India Must Seize The Opportunity In China's Export Curbs Turmoil To Redefine Its Domestic Production

Through 2025, Beijing broadened controls from select raw elements to the full stack, including mining rights, refining and separation, magnet-making, recycling, and even the processing equipment, as well as the know‑how that determines throughput and purity. The October 2025 expansion added more rare earth elements and placed dozens of processing tools under licensing.

In November 2025, targeted curbs on industrial synthetic diamonds and superhard materials will come into force. Earlier in the year, controls were imposed on tungsten, indium, tellurium, bismuth, molybdenum, and several medium‑to‑heavy rare earths commonly used in high‑coercivity magnets and specialty alloys.

Global Competition 

Periodic relaxations for select foreign entities underline a central truth that licensing is a geopolitical dial, not a neutral procedure. By regulating equipment, technology, and collaboration, China can deter rivals’ ambitions, raise compliance costs, and increase the time taken for approvals. This touches semiconductors, EVs, wind power, defence electronics, telecommunications, and precision engineering — everywhere that rare‑earth magnets or superhard consumables are embedded.

India's Domestic Production

India’s EV motors, wind turbines, consumer electronics, precision machining shops, and parts of defence manufacturing rely directly or indirectly on Chinese magnets, phosphors, superhard tools, and specialty inputs, even though it creates both near-term risks and medium-to-long-term opportunities. The country’s coastal monazite sands provide a comparative advantage, while an announced national push for a domestic rare‑earth magnet chain strengthens the ecosystem. Surat’s lab‑grown diamond offers the required skills for an industrial diamond leap.

Building the rare‑earth chain end‑to‑end must be treated as a single continuum, involving separation, metallisation, and magnet sintering. Indian industry should fast‑track joint ventures that embed Japanese and Korean process know‑how into Indian plants and tie incentives to certified purity and yield, not just installed capacity. Co‑locating sintering, coating, and motor assembly with EV and wind OEMs in Gujarat and Tamil Nadu will reduce logistics bottlenecks and compress customer qualification cycles. Recycling should be elevated to a first‑class feedstock strategy. Industrial‑scale recovery of critical elements and alloys from magnet scrap and end‑of‑life EVs can provide a lower‑risk, traceable supply that complements mining and makes India more attractive to export markets sensitive to carbon footprint.

Surat's Growing Role

Surat, already a global centre for lab‑grown jewellery diamonds, can pivot and reorient its capacity to industrial micropowders and CVD tooling. With partnerships between Surat firms, cutting‑tool manufacturers, and semiconductor suppliers, India can align on specifications and accelerate testing and certification to enter a market, presently constrained by controls. This will require modest but targeted policy support in R&D, standards, and expedited testing infrastructure, which can unlock a high‑value precision materials category adjacent to existing skills and capital stock.

To bind the ecosystem, India should create a national standards and testing backbone. A single authority to certify magnet grades, industrial diamond specs, and recycled outputs would shorten qualification cycles for automotive, defence, and electronics buyers, giving domestic producers credibility and speed.

Approvals for monazite processing must be de‑risked through transparent, science‑led radiation and environmental protocols, delivered via single‑window clearances. This will compress timelines, attract patient capital, and build local trust. India’s foreign linkages should be framed not as offers of raw material but as invitations to co‑located processing and production.

A Holistic Framework

Frameworks with the US, Japan, the EU, Australia, and Korea can bundle finance, training, and standards alignment. India’s differentiator is reliability, which includes predictable policy, transparent licensing, robust environmental standards, and export‑compliance infrastructure. In a world where licensing can be used as a geopolitical throttle, being the predictable node is a competitive advantage.

The earliest and clearest wins will likely come in electric mobility and wind, where local magnet chains can stabilise costs and schedules, and collaboration on high‑coercivity grades can reduce dependence on tightly controlled elements. In semiconductors and electronics, domestic industrial diamond powders and tools can mitigate bottlenecks in wafering, dicing, and optics polishing. Defence and aerospace can benefit from indigenous high‑performance magnets and specialty alloys that reduce dual‑use exposure and shorten qualification loops. MSME‑led precision engineering stands to gain from localised grinding wheels, wire saws, and superhard consumables that reduce input volatility and enhance competitiveness.

Bridging The Coordination Gap

India’s coordination gap can be closed by adopting a consortium model that aligns incentives and compresses time‑to‑scale. In this architecture, feedstock comes from IREL and private miners supplying separated oxides with clear traceability; conversion is handled by large metals players that execute metals and alloying projects; finished products are delivered through magnet sintering, coating, and motor integration by automotive and industrial champions; technology is embedded through structured partnerships with Japanese, Korean, and European firms operating within Indian facilities; financing is underwritten by production‑linked support tied to certified output, export‑credit backstops, and green finance for recycling; and demand is anchored by take‑or‑pay offtake contracts with domestic EV, wind, and defence buyers to ensure bankability.

Risk Factors

The risks are real and should be hedged early. Technically, rare‑earth separation is complex, capital‑intensive chemistry; It will be useful to embed foreign expertise, enforce rigorous process controls, and design outcome‑based incentives. Socially and environmentally, thorium‑bearing monazite requires strict radiation management and community consent; publishing standards, engaging locally, and auditing transparently are global gold standards and hence non‑negotiable. Time‑bound clearances and milestone‑linked support can maintain momentum. Geopolitically, licensing can tighten with little notice; redundancy through recycling, diversified imports, and domestic capacity will reduce single‑point failure risk. Market volatility can unsettle projects; multi‑year offtake and hedging frameworks that distribute risk across the chain can stabilise investment.

Ultimately, the chokepoints of this decade lie not only in mines but also in separation columns, sintering presses, sputtering targets, and micronised powders. Nations that master these midstream nodes will dictate terms for EVs, wind energy, chips, and defence electronics.

India’s pitch, therefore, should emphasise reliable rules, transparent standards, compliance‑ready exports, and co‑investment structures that keep learning‑by‑doing inside the country. By coupling coastal mineral wealth to inland manufacturing depth—and by adding Surat’s superhard tooling to magnet–motor corridors in Gujarat and Tamil Nadu—India can turn a global stress event into a platform for compounding strategic relevance. If India can utilise this opportunity with discipline—building capability at home and credibility abroad—it can become the dependable node a jittery world is seeking and lock in a decade of industrial growth aligned with strategic autonomy.

(The writer, a commentator, is a former Indian diplomat who has served as High Commissioner to Canada, Ambassador to Japan & Sudan. Views are personal.)