India and Brazil Ink Critical Minerals Pact to Challenge China's Rare Earth Grip

The signing of the critical minerals agreement between Indian Prime Minister Narendra Modi and Brazilian President Luiz Inácio Lula da Silva represents a pivotal moment in the reorganization of global supply chains. As the world races toward decarbonization and advanced defense capabilities, the reliance on China for rare earth elements has become a strategic vulnerability. This bilateral pact is designed to mitigate that risk by leveraging Brazil’s vast mineral wealth and India’s burgeoning industrial appetite. The agreement marks a significant shift in Global South cooperation, moving beyond traditional trade into the realm of strategic resource security and high-tech industrial collaboration.

For India, the deal is a cornerstone of its broader "multi-alignment" foreign policy. While New Delhi has recently secured high-end technology and financing agreements with the United States, France, and the European Union, those partnerships often lack the direct, on-ground resource access that a Global South ally like Brazil can provide. By bridging Western technology with Brazilian resources, India aims to insulate its manufacturing sector from geopolitical shocks and market volatility. This strategy is essential as India moves toward becoming the world’s fourth-largest economy, a transition that requires massive quantities of iron ore, lithium, and rare earth elements for its infrastructure and electronics sectors.

“

The recent announcement by Brazilian aerospace giant Embraer and India’s Adani Group to manufacture aircraft within India underscores a shift toward high-tech industrial collaboration.

The economic synergy between the two nations extends significantly into the aerospace and defense sectors. Brazil is already India’s primary trade partner in Latin America, with iron ore, crude oil, and vegetable oils dominating the flow of goods. However, the relationship is moving up the value chain. The recent announcement by Brazilian aerospace giant Embraer and India’s Adani Group to manufacture aircraft within India underscores a shift toward high-tech industrial collaboration. This move supports India’s "Make in India" initiative while providing Embraer with a strategic foothold in one of the world’s fastest-growing aviation markets. It also signals a diversification of defense procurement away from traditional suppliers, reflecting a shared desire for technological sovereignty.

Geopolitical pressures have accelerated this convergence. In 2025, both nations faced significant trade headwinds following the imposition of US tariffs, a move that prompted both leaders to advocate for a more resilient and inclusive multilateral trade system. While Washington has since moved to roll back some duties on Indian goods, the experience has reinforced the necessity of South-South cooperation. Lula’s call for a multilateral global governance framework for artificial intelligence during his visit further signals a shared desire to prevent a new "digital divide" or technological hegemony. Both leaders are positioning their nations as leaders of the Global South, capable of shaping emerging rules of global trade and technology governance independently of the traditional Western-led order.

Looking ahead, the success of the mineral pact will depend on the speed of implementation and the ability of both nations to attract private investment into joint mining and processing ventures. The agreement is not just a trade deal; it is a defensive maneuver against the concentration of critical resources in a single geography. As India’s industrial base expands, the demand for these minerals will only intensify. This partnership not only challenges China’s market dominance but also establishes a new blueprint for how emerging economies can secure their technological future through strategic resource diplomacy. Investors and defense analysts should watch for the formation of joint ventures between Indian state-owned enterprises and Brazilian mining firms as the next logical step in this deepening alliance.