Ideas of India Pranay Kotasthane on the Political Economy of Rare Earths and Critical Minerals
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Feb 26, 2026 Pranay Kotasthane, deputy director at the Takshashila Institution and chair of the High Tech Geopolitics Programme, researches critical minerals and tech policy. He unpacks why rare earths matter now. He traces China’s processing advantage and geopolitical leverage. He discusses India’s constraints, recycling as a smart alternative, and where targeted industrial policy can help.
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Geopolitical Leverage Extinguishes Itself
- Weaponizing rare earths can work once but loses value as the world adapts: substitutes, recycling, and investment respond nonlinearly when scarcity becomes strategic.
- Historical examples (rubber, cobalt) show rapid substitution and supply diversification after shocks.
Design Policy Across The Whole Value Chain
- Build projects across the whole chain: extraction, midstream processing, and recycling rather than only mining.
- The Mineral Security Partnership and US projects target upstream, midstream and recycling simultaneously to reduce lead times and bottlenecks.
Subsidize Exploration Not Auctions
- Subsidize exploration rather than auction it away; exploration solves information asymmetry and needs upfront capital support.
- India should fund small exploration grants so more firms reveal resources instead of using slow auctions that deter entrants.
