Why India-UK deal on critical minerals points to New Delhi's anxiety over Chinese grip
This follows a similar initiative by the Quad (comprising India, Australia, Japan, and the United States) earlier this month, where they launched an initiative to secure supply chains of critical minerals, as worries grow around China's stranglehold over the resources, which are vital to new technologies.
The India-UK Vision 2035, a document outlining the broader collaborative goals of the free trade agreement between the two said that they will work together to develop cutting-edge technology and research, building on the Technology Security Initiative, focused on future telecoms, artificial intelligence and critical minerals, laying the ground for future collaboration on semiconductors, quantum, bio-technology and advanced materials.
To further cooperation in critical minerals, the two countries will also establish a UK-India Critical Minerals Guild to 'transform financing standards and innovation', according to a joint statement by the two.
'Together, the two sides will prioritise processing (of critical minerals), R&D, recycling, managing risk to supply chains, market development etc. and will champion circular economy principles and advance traceability,' it said.
As part of the deal with the UK, the second phase of the UK-India Critical Minerals Supply Chain Observatory (SCO) will receive £1.8 million in new funding to set up a satellite campus at the Indian School of Mines in Dhanbad. The funding will also support developing the world's largest digital data infrastructure on the critical minerals value chain, according to an official joint statement.
The SCO is housed within the Industrial Resilience Research Group at the University of Cambridge's Institute for Manufacturing. The first phase, which involved sharing, monitoring, and analysing supply chain data on critical minerals like lithium, copper, nickel, and cobalt, was launched in collaboration with IIT Bombay in October last year.
Critical minerals, which include rare earth elements (REEs), are an important component of various cutting-edge hardware, ranging from semiconductors and electric vehicles to jet fighters.
Rare earth magnets, especially neodymium-iron-boron (NdFeB) magnets, are crucial for EV manufacturing, particularly in electric motors. They provide the strong magnetic fields needed for efficient and powerful electric motors, including traction motors that drive EVs. These magnets also play a major role in other EV components such as power steering systems, wiper motors, and braking systems. China has a near monopoly over the production of these rare earth magnets.
Following US President Donal Trump's tariff onslaught on other countries in April, China implemented specifically designed bureaucratic hurdles for foreign companies looking to source critical minerals from the country.
While the availability of rare earth metals is not limited to China, it is in the efficient processing of these critical elements where Beijing has a substantial lead, which was once enjoyed by the US and Japan.
In recent years, Japan has been able to restart some of its minerals processing industry owing to government policies, but countries like the US and India are heavily dependent on Chinese exports of these metals.
In response to the US administration's reciprocal tariff heat, China restricted exports of seven heavy rare earth metals including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium, as well as rare earth magnets. Earlier, it had also banned exports to the US of gallium, germanium, antimony, and other key high-tech materials with potential military applications.
India's nascent but slowly growing EV industry has faced a direct impact of Chinese restrictions on export of rare earth magnets. None of the applications made by Indian carmakers to source the critical minerals have yet been accepted by Beijing, with automakers staring at shortages and potential setbacks to production plans.
China requires companies to secure an end-user licence, along with an endorsement from the local government that the minerals will not be used for military applications. However, the fact that China has not yet cleared any application from Indian entities is a cause of concern.
Worrying still is a fresh insistence from Beijing that instead of sourcing magnets separately, carmakers buy entire electric motor assemblies from Chinese companies, or simply wait for the Chinese authorities to issue export permits to local rare earth magnet producers, as has been done, according to Reuters, for at least four magnet producers that include suppliers to Volkswagen — the first granted since Beijing restricted shipments earlier this year. The German carmaker is said to have lobbied hard with Beijing to get this done.
Aggam Walia is a Correspondent at The Indian Express, reporting on power, renewables, and mining. His work unpacks intricate ties between corporations, government, and policy, often relying on documents sourced via the RTI Act. Off the beat, he enjoys running through Delhi's parks and forests, walking to places, and cooking pasta. ... Read More
Soumyarendra Barik is Special Correspondent with The Indian Express and reports on the intersection of technology, policy and society. With over five years of newsroom experience, he has reported on issues of gig workers' rights, privacy, India's prevalent digital divide and a range of other policy interventions that impact big tech companies. He once also tailed a food delivery worker for over 12 hours to quantify the amount of money they make, and the pain they go through while doing so. In his free time, he likes to nerd about watches, Formula 1 and football. ... Read More
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Indian Express
13 minutes ago
- Indian Express
India-UK trade deal enables duty-free exports, China's mega dam causes fresh unease, Gaza at breaking point
India signs its first landmark trade deal with the UK, secures enhanced market access in export-oriented and job-creating sectors; During Prime Minister Narendra Modi's visit to the Maldives, New Delhi launches talks on FTA, announces a Rs 4,850-crore line of credit to the maritime neighbouring country; amid reports of India-China thaw, Beijing's mega-dam project on the Brahmaputra (Yarlung Tsangpo) raises hackles in New Delhi; India calls for ceasefire in Gaza, where starvation deaths and killings seem to have crossed a critical threshold; as the clash between Thailand and Cambodia entered its third day, Indians in Cambodia advised to avoid travelling to border areas – here is weekly roundup of key global news. Enhanced market access in export-oriented and job-creating sectors, and duty-free access for 99 per cent of India's exports to the UK are among the major benefits New Delhi bagged as part of its first landmark trade deal with London. The Comprehensive Economic and Trade Agreement (CETA), signed by Prime Minister Narendra Modi and his British counterpart Keir Starmer in London on Thursday (July 24), comes as India seeks to integrate more closely with developed countries. Notably, India's exports to the UK rose by 12.6 per cent to $14.5 billion, while imports grew by 2.3 per cent to $8.6 billion in 2024–25. Bilateral trade between the two nations increased to $21.34 billion in 2023–24 from $20.36 billion in 2022–23. Let's explore the key aspects of the trade deal. Major highlights of the trade deal include: 📌 The trade deal paves the way for 'unprecedented duty-free access for 99 per cent of India's exports to the UK', covering almost the entire trade basket. This includes key job-creating sectors such as textiles, leather, footwear and gems and jewellery, as well as sectors like engineering goods and automobile components. 📌 For instance, the UK will eliminate duties of up to 20 per cent on textiles, giving a competitive edge to India – the fourth-largest textile supplier to the UK – over other competitors like China and Bangladesh. Micro, Small and Medium-scale Enterprises (MSMEs), which have a dominant presence in the sector, are also expected to benefit from the agreement. 📌 India extracted enhanced market access in export-oriented sectors such as marine and animal products, including seafood, dairy, and meat products, with tariffs reduced to zero from up to 20 per cent. Tariffs on tea and coffee have also been scrapped. 📌 For the first time, India has allowed firms from the UK to participate in government tenders, giving them Class Two status under 'Make In India' rules, which require 20-50 per cent domestic value addition. However, experts warned that the 20 per cent local content rule, which allows UK firms to use up to 80 per cent inputs from third countries while still receiving preferential treatment, dilutes the benefits that programmes like Make in India and Atmanirbhar Bharat were designed to protect. 📌 Experts also indicated that the access granted to the UK could set a precedent for future Free Trade Agreements (FTAs) with larger economies like the European Union (EU) or the United States (US), potentially eroding India's ability to use public procurement as a lever for policy goals such as import substitution, domestic capacity-building, and employment generation. 📌 Moreover, as part of the new deal, average tariffs on British products will also fall from 15 per cent to 3 per cent, potentially leading to a large increase in exports from the UK. Britain's large and varied manufacturing sectors will also benefit from tariff cuts on aerospace (reduced from as high as 11 per cent to 0 per cent), automotives (from up to 110 per cent down to 10 per cent), and electrical machinery (from up to 22 per cent). 📌 For the first time, India also halved the import tariffs on UK-origin alcohol, including whisky, brandy, rum, vodka, liqueurs, mead, cider, and tequila from 150 per cent to 75 per cent. However, these products are expected to meet a Minimum Import Price (MIP) threshold of $5 per litre or $6 per 750 ml bottle, effectively shielding India's domestic liquor market from low-cost imports while giving premium UK spirits a competitive edge. 📌 Duties on internal combustion engine cars have also been slashed to 30-50 per cent, paving the way for more British luxury vehicles to enter India, although the benefit will be quota-based and apply to a limited number of vehicles. Zero-emission cars will also see reduced tariffs, depending on their cost, benefiting automakers like Jaguar Land Rover, a manufacturer of SUVs. No concessions were given to electric, hybrid, and hydrogen-powered vehicles in the first five years. 📌 The UK and India have also agreed to ease the exchange of services. They will now require temporary employees to pay social security contributions only in their home countries, which would mean greater take-home salaries. The agreement increases market access in critical areas such as IT and IT-enabled services as well as financial, legal, professional and educational services. 📌 But experts said that India seems to have conceded much when it comes to Intellectual Property Rights (IPR), as UK patent holders are now allowed to give voluntary licences as opposed to compulsory licences, representing a marked shift. Soon after concluding his two-day visit to the UK, PM Modi arrived in the Maldives, where India also launched talks on FTA and announced a Rs 4,850-crore line of credit to the maritime neighbouring country. 'Peace, stability, and prosperity in the Indian Ocean Region are our shared goals…,' PM Modi said in his remarks after holding talks with Maldivian President Mohamed Muizzu, focusing on consolidating cooperation in areas of trade, defence and infrastructure. This marked a significant turnaround in the relationship which had seen some unease at the beginning of last year. That apart, it is noted that the prevailing situation, marked by US President Donald Trump's tariff policies upending the global trading architecture, incentivised countries to swiftly secure new markets. In that context, the India-UK trade deal could set the template for the negotiations that New Delhi is currently having with the EU. India and the EU have agreed to seven out of 23 chapters in their agreement, even as India-US trade talks drag on. India-US trade talks Negotiations over the India-US trade deal will continue as American trade negotiators are expected to visit India mid-August – well past President Donald Trump's August 1 deadline, after which reciprocal tariffs are set to take effect. While India and the US have agreed on a wide range of tariff lines, the negotiations — which currently only involve market access for goods — appear to be stuck on sensitive sectors such as agriculture and automobiles, both of which are key job creators in India. In the meantime, Trump has announced new deals with Japan, the Philippines and Indonesia, after similar agreements with Britain and Vietnam, with the tariffs ranging between 10 and 20 per cent. Experts have warned that the Japan deal offers a cautionary tale for India, because as part of it, the US gained market access for American agricultural products, including politically sensitive items such as rice. In the case of India, reliance on agriculture remains critically high, with over 700 million Indians dependent on it. Meanwhile, the Indian Coordination Committee of Farmers Movements – a network of farmers' organisations across 11 states – has urged the government to exclude all aspects of agriculture from the proposed trade deal with the US in order to safeguard Indian farmers' interests. Amid efforts to restore India-China ties ruptured by the LAC military standoff and Galwan clash of 2020, Beijing's mega dam project on the Yarlung Tsangpo River in Tibet (which flows down to India as Brahmaputra) has raised hackles in New Delhi over potential downstream impacts, with Arunachal Chief Minister Pema Khandu describing the project as a 'ticking water bomb'. The massive $167 billion hydropower project on the Yarlung Tsangpo River, just before it bends and enters Arunachal Pradesh, where it is called the Siang, will be China's largest since the Three Gorges Dam (completed in 2012) in Sandouping. Capable of generating 60 gigawatts (GW) of power, the project is expected to boost China's domestic economy. While around 30 per cent of the Brahmaputra's waters originate in China, the majority comes from rainfall within India's catchment areas. As a result, the Chinese dam's immediate impact is expected to be felt the most in Arunachal Pradesh – particularly in the Siang region. In addition to flooding concerns, the Chinese dam could also disrupt water flow to proposed downstream hydro projects. The Northeast holds nearly half of India's 133 GW hydropower potential, over 80 per cent of which remains untapped. Of the 60 GW estimated potential, about 50 GW lies in Arunachal Pradesh alone. In 2013, India and China signed a Memorandum of Understanding (MoU) on sharing information on river flows. But, by all accounts, Beijing has not always been open to sharing hydrological data. India has proposed the 11.2 GW Upper Siang Multipurpose Project – a massive storage-based dam in the Siang district – to counter China's upstream development, but progress has been slow. Such developments come close on the heels of a reported thaw in India-China ties, evident in the resumption of the Kailash Mansarovar Yatra, an understanding to resume direct flights, and ease visa restrictions. This week, India said it will resume issuing tourist visas to Chinese nationals after a five-year pause, beginning Thursday. The 34th meeting of the Working Mechanism for Consultation and Coordination on India-China Border Affairs (WMCC) held on Wednesday (July 23) in Delhi also discussed the preparation for the next round of the Special Representatives' Talks on the India-China Boundary Question to be held in India later this year. However, such efforts towards normalisation come as the de-escalation process – the withdrawal of troops from forward positions that would lead to restoring patrolling to pre-2020 levels – is yet to begin at the border. In addition, Beijing's role during Operation Sindoor has also impacted India-China ties. In the meantime, a statement issued by the Inter-Services Public Relations (ISPR), the media wing of the Pakistan military, over Army chief Asim Munir's visit to China this week said that in their talks with Munir, 'the Chinese leadership lauded the Pakistan Armed Forces as a cornerstone of resilience and a vital contributor to peace in South Asia'. Pakistan has extended the closure of its airspace for Indian aircraft and airlines by a month, till the morning of August 24, following which India also announced an extension of its ban on Pakistani airlines and aircraft from entering the nation's airspace for the same period. Following the Pahalgam terror attack in April, as diplomatic relations between Delhi and Islamabad deteriorated, Pakistan on April 24 shut its airspace to Indian aircraft for at least a month, banning them from overflying its airspace. On April 30, India, too, closed its airspace to Pakistani aircraft. While starvation deaths and killings at aid points seem to have crossed a critical threshold in Gaza, reports of Israel and the US recalling their negotiating teams from Qatar further deepened fears of a worsening crisis. Amid this, France's decision to recognise the state of Palestine might be seen in the context of the 'two-state solution' but is unlikely to bring any relief to the 2 million people in Gaza who have been grappling amid months of Israeli atrocities. At least 48 people died of causes related to malnutrition, including 28 adults and 20 children, in the last three weeks, the Gaza Health Ministry said Thursday. A total of 17,000 children in Gaza suffer from severe malnutrition, Al Jazeera cited the director of Medical Relief in Gaza, Dr Mohammed Abu Afash, as saying. Israel imposed a total blockade in Gaza in March and allowed only a trickle of supplies the past two months through the Gaza Humanitarian Foundation (GHF), which replaced the 400 UN-run sites shut down by Israel over unproven claims that aid is being diverted by Hamas, causing the dire humanitarian crisis and mass starvation. The United Nations agency for Palestinian refugees (UNRWA) warned on Thursday (July 24) that 'families are breaking down' amid the hunger crisis. The UN Office for the Coordination of Humanitarian Affairs (OCHA) added that Israel has been preventing it from verifying aid waiting at distribution centres. A joint letter signed this week by 109 aid agencies, including Doctors Without Borders, Oxfam and Amnesty, has accused the Israeli government of deliberately obstructing the flow of aid. Gaza's Health Ministry also called for an immediate end to famine and held 'the Israeli occupation, the US administration, and other states complicit in this genocide – such as the UK, Germany, and France – as well as the international community at large, fully responsible for this historic crime,' Al Jazeera reported. Meanwhile, leaders of Germany, France, and the UK called on Israel to immediately lift its blockade on aid supplies entering the famished Palestinian territory. India also voiced strong concern over the current situation in Gaza at the UNSC, and called for an immediate ceasefire, uninterrupted humanitarian aid, and the release of Israeli hostages by Hamas. However, Israeli Prime Minister Benjamin Netanyahu said Friday (July 25) that his government was considering 'alternative options' to ceasefire talks with Hamas. US President Trump blamed Hamas for the apparent collapse of Gaza ceasefire talks and warned that the group would be 'hunted down'. Nonetheless, Hamas responded by saying that it had submitted a positive and constructive response to the latest proposal it was offered. Israel's war on Gaza has killed at least 59,676 people and wounded 143,965. An estimated 1,139 people were killed in Israel during the Hamas-led October 7, 2023, attacks, and more than 200 were taken captive. In the meantime, Iran's president Masoud Pezeshkian said that while Tehran remains wary of its current ceasefire with Israel, it won't rule out diplomacy, Bloomberg reported. His statement came as Iran and European nations, the UK, France, and Germany, often referred to as the E3, held talks in Istanbul on Friday and agreed that they need to hold another round of nuclear talks soon. Friday's talks broke a deadlock over Iran's nuclear programme, after Israeli and US strikes on Iran in June derailed previous negotiations. Clashes on the Thai-Cambodian border continued for the third day on Saturday, prompting tens of thousands to flee their homes and aggravating fears of an extended conflict, with the total death toll reaching 32. The two countries have engaged in standoffs since the killing of a Cambodian soldier late in May during a brief skirmish, with both sides claiming to act in self-defence. More than 130,000 people have been displaced in the worst fighting between the two Southeast Asian neighbours in 13 years, Reuters reported. The UN Security Council held an emergency meeting behind closed doors late Friday in New York, but didn't issue a statement. A council diplomat said all 15 members called on the parties to de-escalate, show restraint and resolve the dispute peacefully, Reuters reported. The council also urged the regional bloc, the Association of Southeast Asian Nations known as ASEAN, to help resolve the border fighting, the diplomat said, speaking on condition of anonymity because the meeting was private. Thailand and Cambodia have bickered for decades over the jurisdiction of various undemarcated points along their 817-km (508-mile) land border, with ownership of the ancient Hindu temples Ta Moan Thom and the 11th century Preah Vihear central to the disputes, according to Reuters. Preah Vihear was awarded to Cambodia by the International Court of Justice in 1962, but tension escalated in 2008 after Cambodia attempted to list it as a UNESCO World Heritage site. That led to skirmishes over several years and at least a dozen deaths. India on Saturday (July 26) advised its citizens in Cambodia to avoid travelling to border areas as the clash between Thailand and Cambodia over a disputed border entered its third day. Send your feedback and ideas to Ashiya Parveen is working as Commissioning Editor for the UPSC Section at The Indian Express. She also writes a weekly round up of global news, The World This Week. Ashiya has more than 10 years of experience in editing and writing spanning media and academics, and has both academic and journalistic publications to her credit. She has previously worked with The Pioneer and Press Trust of India (PTI). She also holds a PhD in international studies from Centre for West Asian Studies, JNU. ... Read More
Indian Express
13 minutes ago
- Indian Express
‘We are not giving up': Families of Indian prisoners in Qatar demand justice and govt support
'I shifted my daughter from a private school to a government school since I cannot afford it anymore,' Kuldeep said, sobbing over a phone call, while boarding a bus from Delhi to Sangrur in Punjab. She was among the 50 families from Uttar Pradesh, Punjab, Kerala, and Karnataka who protested at Jantar Mantar Thursday, led by the Indian Pravasi Movement. They urged the government to immediately implement the 2015 India-Qatar agreement on the transfer of sentenced people to repatriate Indian prisoners and an audit of the Indian Community Benevolent Fund (ICBF). Approved by Prime Minister Narendra Modi in December 2014, the agreement allows 'Indian prisoners imprisoned in Qatar or vice-versa to be near their families, for serving the remaining part of their sentence and shall facilitate their social rehabilitation'. Similar agreements have been signed with countries such as the United Kingdom, Mauritius, Bulgaria, Brazil, Cambodia, Egypt, France, Bangladesh, South Korea, Saudi Arabia, Iran, Kuwait, and Sri Lanka. The ICBF, under the auspices of the Embassy of India in Doha, Qatar, has been established to provide financial, medical, and other forms of assistance to distressed and underprivileged Indians. However, Kuldeep's husband, Sandeep Singh, 40, arrested on charges of possession of drugs in his car, has been in jail for two and a half years, serving 10 years of imprisonment. His wife and a fourteen-year-old daughter live alone. 'He shifted to Doha in 2007 and has been a taxi driver since then. Recently, he bought his private car. One day, a customer left a bag, which had drugs. Later, the police arrested my husband. Now he is lodged in the central jail, and earns money by washing the clothes of the officers, and then calls us with that money.' Kuldeep is angry with the government's lack of support. 'I have given multiple written complaints now, even to the PM office, the Indian and Qatar embassies. My husband calls me every Friday. On the last call, he said that to date, the lawyer assigned to him by the Qatar government has never come to meet him or present his case. The judge just gave the verdict.' However, she had learned about the protest through her husband a week earlier. 'I have come to Delhi multiple times to file complaints, have exhausted all my resources, and I don't have a job either. He told me over the phone that a group from Kerala is protesting in Delhi, as he had learned from other inmates. I have not given up hope, wherever they say, I will go,' she said. For Parveen Kaur, from Amritsar, her biggest challenge is to make her children understand their father's whereabouts. 'They cry when he calls, asking when you will come. My seven-year-old daughter has lost interest in studies,' she said while travelling along with Kuldeep. Her husband, Gurjeet Singh, also a taxi driver in Qatar, was arrested in a drug case on October 12, 2022. 'I had called him in the daytime, and he said he would call me back. But when he never did, I rang him multiple times at night, then he said he was in the police station,' she said. Now, raising her two children alone, she said that her parents are assisting her, but they are also taking a step back due to the expenses. 'I had sold my jewellery and collected Rs 4.5 lakh and did a direct bank transfer to the Qatar lawyer. His (lawyer's) wife, an Indian, translated to me what the lawyer was saying. They said my husband would be deported soon. But after that, they stopped picking up my calls,' she said, her voice shaking, adding that she, too, received no help from the Indian embassy and the Indian government. Ashraf Ponnain, from Malappuram district in Kerala, was once a prisoner in Qatar, but is now back in India. However, during his last visit, he was unaware that his son, Naushad, had also been implicated in a cheque fraud case. 'I found out that my son was in jail after I got out. They accused him falsel; the sponsor had planted everything. The sponsor made him sign a blank cheque of 1 lakh 40 thousand Riyal. I have lost all the resources now,' he said, adding that he had already paid large amounts to get himself out by selling his shops back in Kerala, and now he has no money left to help his son. R J Sajith, president of the Indian Pravasi Movement, said the prisoners, all coming from poor households, have already borrowed money to reach the foreign country. 'Why is there no implementation of the agreement? Where are the funds from the ICBF going? These people are voiceless, but the embassy and the government have offered no help till now,' he alleged.
Hindustan Times
13 minutes ago
- Hindustan Times
PM Modi at Maldives Independence Day celebrations with President Muizzu
Prime Minister Narendra Modi on Saturday attended the 60th Independence Day celebrations of Maldives, being organised at Republic Square in Male. President Mohamed Muizzu was with Modi, who was Guest of Honour at the event. PM Narendra Modi with Maldives President Mohamed Muizzu on the concluding day of his visit to the island nation on July 26.(X/@narendramodi) Also read | From 'India out' to '21-gun salute' for Modi: Downs, ups of India-Maldives ties Modi later posted on X that he was 'deeply honoured' to have witnessed the celebrations. 'The productive talks with President Muizzu will add significant energy to our bilateral relations,' his post read. India has decided to extend a $565 million line of credit to the Maldives, the PM said. A free trade agreement between the two countries is in the works, he added. Modi's visit marks a significant reset in India-Maldives relations after a brief spiral as Mohamed Muizzu came to power while running an 'India Out' campaign. Muizzu had sought to get closer to China instead. Also read | Why Modi's Maldives visit matters But diplomatic initiatives have brought the equation back on track, according to Indian officials. Muizzu visited India in October last year, and now Modi made the two-day visit — the first by any foreign leader since Muizzu came to power — that concludes on Saturday. Speaking to the press, President Muizzu described Modi as 'a wonderful person', and said: "The Maldives and India have a very good relationship that goes back centuries. With PM Modi's leadership, cooperation between the two governments is going to be even more prosperous in the days ahead."
