India and Brazil Forge Critical Minerals Alliance to Challenge China’s Monopoly

The signing of the critical minerals agreement in New Delhi represents a strategic pivot for both India and Brazil, two of the world’s fastest-growing economies. As the global race for the materials underpinning the green energy transition intensifies, this partnership aims to secure the raw inputs necessary for electric vehicles, wind turbines, and advanced electronics. By aligning their interests, Modi and Lula are signaling that the Global South will no longer be a passive participant in the supply chains dominated by China, which currently controls nearly 90% of global rare earth processing. This move is not merely about trade; it is about establishing industrial sovereignty in an era where resource security is synonymous with national security.

For India, the deal is a crucial component of its broader China Plus One strategy. While New Delhi has recently secured high-tech and financing agreements with the United States, France, and the European Union, those Western partnerships primarily focus on the downstream end of the value chain—processing and manufacturing. The alliance with Brazil, a resource-rich powerhouse, provides the upstream security India needs. As Rishabh Jain of the Council on Energy, Environment and Water noted, these South-South alliances are critical for securing actual on-ground resource access and shaping the emerging rules of global trade that favor developing nations rather than just established Western powers.

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By aligning their interests, Modi and Lula are signaling that the Global South will no longer be a passive participant in the supply chains dominated by China, which currently controls nearly 90% of global rare earth processing.

The timing of the agreement is also a response to recent global economic volatility. Both India and Brazil faced significant headwinds in 2025 following the imposition of U.S. tariffs, which underscored the vulnerability of relying too heavily on any single Western market. Although Washington has since pledged to roll back some duties on Indian goods under a recent trade deal, the experience has accelerated a push for diversification. Brazilian diplomat Susan Kleebank emphasized that the leaders are focused on the challenges to multilateralism, suggesting that this mineral deal is part of a larger effort to insulate their economies from unilateral trade actions by major powers and to build a more multipolar trade environment.

Beyond raw minerals, the relationship is evolving into high-tech industrial collaboration. The recent announcement by Brazilian aerospace giant Embraer and India’s Adani Group to build aircraft in India illustrates this shift. This synergy between Brazilian engineering and Indian manufacturing capacity creates a blueprint for how critical mineral security can lead to broader industrial sovereignty. As India moves toward becoming the world’s fourth-largest economy, its demand for iron ore—already a major Brazilian export—and rare earths will only grow, making Brazil its most indispensable partner in Latin America. The collaboration extends to other emerging sectors as well, including Lula’s call for inclusive global governance for artificial intelligence during his visit to the AI Impact summit in Delhi.

Looking ahead, the success of this deal will depend on the speed of implementation and the ability of both nations to attract the necessary investment for mining and refining infrastructure. While the agreement provides the political framework, the private sector must now step in to develop the mines and processing plants. Investors should watch for further announcements regarding joint ventures in lithium, cobalt, and neodymium—the materials often called the new oil of the 21st century. This partnership not only secures India’s energy transition but also positions Brazil as a central hub in the new global energy architecture, potentially creating a powerful new axis in the international commodities market.