India-Russia Strengthen Strategic Minerals Alliance, Look Beyond Oil Trade Pressure

In a move signaling a deepening of strategic ties, India and Russia have initiated discussions on the extraction and processing of rare earth minerals, a critical component of modern technologies, as part of broader efforts to enhance industrial cooperation. The talks come at a time when the United States is increasing pressure on nations engaging in oil trade with Russia, a result of ongoing geopolitical tensions surrounding the war in Ukraine.

The rare earth discussions took center stage during high-level bilateral meetings held in Moscow, where Indian and Russian officials explored avenues to expand economic engagement in areas such as mining, metallurgy, heavy engineering, fertilizers, and shipbuilding. Rare earth elements (REEs), which are essential for the manufacture of electric vehicles, renewable energy systems, defense equipment, and electronics, have emerged as a focal point in India’s strategic resource planning, particularly as global supply chains remain vulnerable due to heavy Chinese dominance in the sector.

Rare Earths: Strategic Resource for Both Nations

India possesses vast untapped rare earth deposits but lacks large-scale, advanced processing capacity. Russia, meanwhile, has both technological expertise and interest in diversifying its mineral export partnerships. Through collaboration, both nations hope to reduce dependency on China, which currently controls over 60% of global REE production.

The talks discussed the possibility of joint ventures in rare earth mining and refining, with Russia offering support in technology and equipment. Indian officials stressed the importance of building indigenous capacity for value-added processing, aiming to not just extract but also refine and manufacture high-tech components domestically.

A senior Indian government official, present during the meetings, emphasized the mutual benefit: “Russia brings deep mining and metallurgical experience, and India brings a fast-growing demand for advanced materials. Our cooperation can be the backbone of a resilient alternative supply chain for rare earths.”

Expanding the Scope: Shipbuilding, Fertilizers, and Heavy Industry

The rare earth discussions were part of a broader dialogue on industrial cooperation. India is seeking to leverage Russian expertise in heavy engineering and shipbuilding to enhance its domestic capabilities under the ‘Make in India’ initiative. Moscow, on the other hand, is eager to boost exports of key industrial inputs like potash and other fertilizers, especially in the wake of Western sanctions that have restricted its access to Western markets.

Russian shipbuilding firms, particularly those based in Vladivostok and the Far East, are keen to collaborate with Indian companies to develop both military and civilian vessels. This dovetails with India's own ambitions to build a robust blue economy and enhance maritime security in the Indo-Pacific.

The two nations are also discussing deeper ties in the defense industrial complex, though those discussions remain separate from the current round focused on civilian sectors.

Energy Trade Under Watchful Eyes

The strengthening of India-Russia cooperation comes against the backdrop of renewed scrutiny by the U.S. over countries that continue to trade oil with Moscow despite the sanctions imposed after Russia’s 2022 invasion of Ukraine. India, which has emerged as one of the largest buyers of discounted Russian crude, has maintained its position that its energy policy is guided by national interest and market dynamics.

While Washington has not imposed direct sanctions on Indian entities, recent signals indicate increased monitoring of transactions that could be perceived as undermining the West's sanctions regime. Several Indian shipping and trading companies have reportedly been warned indirectly via international intermediaries.

Despite this, India’s crude imports from Russia remain strong, underscoring the strategic calculus at play. Moscow now accounts for nearly 30% of India's oil imports, a dramatic increase from pre-war levels when it was less than 2%.

Indian officials have reiterated that the country follows a sovereign energy policy and complies with all international laws. The U.S., meanwhile, has walked a diplomatic tightrope—maintaining pressure on Moscow while avoiding overt friction with New Delhi, a key partner in its Indo-Pacific strategy.

Industrial Cooperation as a Strategic Hedge

India’s engagement with Russia in industrial sectors beyond energy is seen as a long-term strategic hedge. By building durable supply chain partnerships in critical materials, India aims to insulate itself from future global shocks and geopolitical disruptions.

For Russia, the collaboration offers economic relief and diplomatic legitimacy at a time when its economy is under strain due to Western isolation. The Kremlin views its economic ties with India, China, and parts of the Global South as essential to its future growth.

Moreover, Russia is also keen on accelerating regional development, especially in its Far East, where Indian businesses have shown growing interest. Several Indian companies are already exploring investment opportunities in the Russian Far East, particularly in sectors like timber, coal, seafood processing, and port logistics.

Future Roadmap

Both sides have agreed to set up joint working groups to explore concrete projects in the rare earth and heavy industry sectors. These groups will report back with feasibility studies, investment models, and implementation timelines.

The upcoming India-Russia Inter-Governmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation (IRIGC-TEC), scheduled later this year, is expected to formalize several of these discussions into Memoranda of Understanding (MoUs) or firm contracts.

Additionally, talks are underway to facilitate smoother financial transactions between the two countries through alternative payment systems, including national currencies and other mechanisms that bypass the U.S.-dominated SWIFT system. These efforts aim to protect bilateral trade from any future escalation of Western sanctions.

As global power dynamics continue to shift, the India-Russia relationship is evolving beyond its traditional defense-centric nature. By focusing on rare earths, heavy industry, and energy cooperation, the two nations are crafting a partnership that addresses both economic resilience and strategic autonomy.

While the U.S. continues to pressure countries over ties with Russia, India’s pragmatic diplomacy reflects its desire to maintain strategic independence. The rare earth cooperation is not just a bilateral deal; it is a signal of a new multipolar economic order where countries are seeking partners beyond the traditional West.

This new phase in India-Russia ties could significantly reshape the resource and technology landscape in Asia and redefine India’s position in the global industrial value chain.