India–Brazil MoU on Rare Earths to Strengthen Strategic Leverage

India and Brazil signed a Memorandum of Understanding (MoU) on rare earths and critical minerals during the state visit of Brazilian President Luiz Inácio Lula da Silva to India. The agreement is expected to enhance India’s bargaining power in securing key inputs for its clean energy, electronics, and defence sectors.

Enhancing India’s Negotiating Position

The MoU diversifies India’s supply sources for rare earths and critical minerals. Previously, dependence on a limited number of suppliers constrained India’s negotiating flexibility. With Brazil emerging as an alternative source, India can negotiate better pricing and supply terms, reducing vulnerability to export controls or geopolitical disruptions.

The agreement also sends a positive signal to global companies that supply chains for critical inputs will be more resilient. This could encourage fresh investments in downstream manufacturing in India.

Resource Base: Brazil’s Mineral Strength

According to the U.S. Geological Survey, Brazil possesses significant reserves:

• 21 million tonnes of rare-earth-oxide equivalent
• 2.7 billion tonnes of bauxite
• 270 million tonnes of manganese
• 0.4 million tonnes of lithium

For Brazil, the MoU offers an opportunity to convert its mineral wealth into greater industrial value addition through cooperation with India in processing and manufacturing.

Alignment with India’s Critical Minerals Strategy

The agreement aligns with India’s broader push to secure critical minerals and build domestic capacity across the value chain.

National Critical Mineral Mission

In January 2025, the Union Cabinet approved the National Critical Mineral Mission, covering exploration, mining, beneficiation, processing, and recycling of critical minerals. The mission will run from 2024–25 to 2030–31 and aims to reduce India’s dependence on single-country supply chains.

Policy and Legal Reforms

• In July 2023, India released a list of 30 critical minerals vital for economic security and energy transition.
• The Mines and Minerals (Development and Regulation) Amendment Act, 2023 empowered the Centre to auction blocks for critical and strategic minerals.
• Customs duty reductions in recent budgets have lowered the cost of importing scarce mineral inputs and recyclable scrap to boost domestic processing.

Push for Domestic Manufacturing

The government is simultaneously promoting late-stage manufacturing. India aims to begin domestic production of rare-earth permanent magnets by the end of 2026 under a government-backed programme. This move is expected to reduce import dependence in strategic sectors such as electric vehicles and defence manufacturing.