Geopolitics is evolving, and it is evolving fast, unpredictably and more ruthlessly than ever. However, this time the global power play is not about oil. It is over something rarer than fossil fuel — critical rare earth metals and minerals.

When Donald Trump took the oath as the president of the United States on January 20, 2025, everyone knew it was going to be a bumpy ride ahead. And, that is exactly what followed with his aggressive reciprocal tariff move.

Under this regime, Trump announced steep reciprocal tariffs ranging from 10% to 50% on 24 nations, slapping a 34% tariff on Chinese imports in response to Beijing’s existing 76% duties on American goods.

China didn’t take very long to respond. On April 4, just two days after Trump’s announcement, it dropped a geopolitical bombshell, banning the export of seven critical rare earth elements — samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium.

These elements are crucial for producing rare earth magnets that have their applications in everything from smartphones and fighter jets to electric vehicles and wind turbines.

As anyone would have predicted, the impact was prompt. Markets trembled as many tech, defence and manufacturing companies whiteknuckled, fearing the worst — a pandemic deja vu when the world had to endure semiconductor shortages, as supply chains from China remained disrupted due to lockdowns.

As far as China is concerned, a swift answer by the East Asian nation is a reminder to the world that when it comes to critical minerals, it holds the dominance and will not hesitate to play hardball if need be.

Amid this tug-of-war, the Indian automobile sector seems to be on the receiving end. Ironically, industry leaders look unaffected. Now, before we get into unravelling what is fuelling their confidence, let’s steal a glance at the government’s stance on the situation.

Preaching For Self-Reliance On Rare Earth

Just like the pandemic, when global production lines came to a grinding halt due to the disruption in semiconductor supplies from China, India now finds itself at a similar crossroads. However, this time, it’s rare earth magnets.

Many Indian automotive majors, including TVS Motor and Bajaj Auto, have already flagged possible production delays. Maruti Suzuki India is also recalibrating production of its upcoming model e-VITARA due to the shortage of rare earth magnets.

According to industry experts, China is deliberately choking the supply chain of India’s automotive industry and other booming........

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