As China tightens export controls on critical minerals, notably rare earth elements essential for electric vehicle (EV) motors, global supply chains are experiencing significant disruption. This shift is prompting countries, particularly India and Japan, to explore alternative sources and strategies to secure these crucial materials, and India’s battery recycling sector is emerging as a vital component in this new landscape.
China’s recent export restrictions cover minerals such as neodymium, praseodymium, dysprosium, and terbium, indispensable for manufacturing high-performance permanent magnets used in EVs, smartphones, and defence technology. These measures have rattled global automakers, who face production delays and soaring costs. Although some immediate supply threats have moderated following a U.S.-China agreement to expedite rare earth shipments, the broader uncertainty remains due to opaque Chinese export licensing practices and intensified customs scrutiny that extends beyond listed restricted items. The European industry and several Western companies have reported ongoing difficulties in securing export licences, creating delays of up to two months and pushing some to switch to costly airfreight solutions.
Against this backdrop, India is positioning itself as a critical player in the battery recycling and critical minerals ecosystem. A Japanese delegation is scheduled to engage with key Indian players such as Vedanta and Lohum, aiming to diversify supply chains away from their heavy reliance on China. This comes ahead of the Battery and Critical Minerals Ecosystem Conference held in New Delhi, which gathers government officials, OEMs, financiers, and recycling firms from across India, Japan, Australia, and the U.S. The conference focuses on addressing gaps in refining, recycling, and securing stable off-takers—areas where India sees immediate potential.
While India is ramping up lithium exploration and refining infrastructure, experts suggest that recycling offers a more scalable and near-term solution. The global refining capacity remains concentrated in a handful of countries, exposing the EV and clean tech sectors to geopolitical risks. Recycling not only mitigates reliance on primary mining but also supports environmental sustainability by reducing waste and conserving resources.
Beyond recycling, Indian companies are also making strides toward domestic production to reduce dependency on imports. For example, Sona Comstar, a major Indian automotive component supplier, plans to begin domestic manufacturing of rare earth magnets by 2025. The company aims to cut its reliance on Chinese imports, which amounted to 120 metric tonnes last year and were projected to rise with escalating EV demand. With a fivefold increase in revenue over five years, Sona Comstar’s CEO highlighted the firm’s commitment to boosting Indian self-sufficiency through investments in local production and diversification into new markets, including railways and neighboring countries like Japan and South Korea.
The ripple effects of China’s export restrictions are not limited to rare earth magnets. Battery manufacturers worldwide are grappling with acute shortages of antimony, a critical component in lead-acid batteries and military equipment. With China responsible for 60% of global antimony supply and processing most of the remainder, its export ban to the U.S. has quadrupled prices and triggered a gray market surge. Although no significant production cutbacks have occurred yet, prolonged price inflation threatens the battery industry’s stability. This crisis underscores the urgent need for countries to develop domestic processing and recycling capabilities, as well as strategic partnerships, to reduce vulnerability to concentrated supply sources.
India’s evolving clean energy transition further reinforces the importance of recycling initiatives. As electric vehicles, solar panels, and wind turbines proliferate, the challenge of managing electronic waste grows. Used EV batteries in places like Kenchanahalli are already being repurposed to provide power during outages, showcasing practical benefits and local resilience. However, experts stress the necessity for clearer regulations and incentives to scale such efforts nationally. The government has begun addressing these issues by integrating EV components into e-waste policies, signalling growing recognition of a circular economy’s role in environmental sustainability and job creation.
The Battery and Critical Minerals Ecosystem Conference also serves as a platform for crucial business-to-business discussions, connecting Indian recyclers with global OEMs and financiers, including the Japan Bank for International Cooperation and the International Finance Corporation. These interactions focus on securing financial backing, joint research and development, and long-term offtake agreements. Such measures are deemed essential to break the traditional dominance in the battery and mineral sectors and establish India as a reliable, democratic alternative for critical mineral recovery.
In conclusion, while China continues to dominate the rare earth and battery minerals markets, its tightening export controls have accelerated efforts to diversify supply chains. India, leveraging its growing recycling infrastructure and nascent domestic production capabilities, is emerging as an increasingly important hub in the global EV supply network. With strategic collaboration from Japan and other partners, and growing government support, India’s battery recycling sector not only offers economic opportunity but also a critical lifeline for the global shift toward clean technology amid escalating geopolitical risks.
Source: Noah Wire Services
