India’s Strategic Autonomy Test: Can India Reduce Dependence Without Losing Independence?

Strategic autonomy sounds strongest when a country has choices.

India certainly has them on paper. It can deepen ties with the United States, maintain relations with Russia, work through the Quad, participate in multiple coalitions, and still engage China where its interests require it.

The harder question is whether India has enough economic and industrial capacity underneath those diplomatic choices to use them freely.

That is where the problem becomes more complicated.

India can decide not to join a military alliance. It can refuse pressure from one partner and negotiate with another. But if its factories depend on Chinese machinery, its electronics industry depends on Chinese components and technical expertise, and its critical-mineral supply chains depend heavily on Chinese processing, diplomatic freedom has a material limit.

India’s strategic-autonomy problem is therefore becoming less about whom it chooses to align with and more about whether it has built enough capacity to make those choices meaningful.

Strategic autonomy needs an industrial foundation

The distinction between strategic autonomy and self-reliance is important here.

Strategic autonomy is primarily a foreign-policy principle: maintaining enough freedom of action to pursue national interests without being compelled by another power. Self-reliance is the economic and technological capacity that makes that freedom possible.

India has made considerable progress on the first. The second is more uneven.

Rare earths illustrate the problem particularly well.

China produces roughly 70 percent of the world’s rare earths and processes around 90 percent of global output. India has its own reserves and an Indian Rare Earths Limited processing capacity of roughly 10,000 tonnes, but Chinese refining exceeded 200,000 tonnes in 2023.

The difference is not simply about how much material lies underground.

It is about what happens after the material is extracted.

If India has the ore but lacks sufficient refining and separation capacity, the resource itself does not provide much strategic freedom. The critical capability sits further along the value chain.

That distinction matters because the same pattern appears elsewhere. China has accumulated processing facilities, specialized machinery, supplier networks and technical expertise across several industrial sectors.

India cannot negotiate those capabilities into existence.

It has to build them.

A factory can be in India without the entire production system being Indian

Electronics provides an even clearer example.

India has made genuine progress in smartphone manufacturing. Apple assembled roughly $14 billion worth of iPhones in India in FY24, while the Production-Linked Incentive scheme has allocated more than ₹8,800 crore to electronics manufacturing.

Those numbers represent a real shift in India’s manufacturing position.

But final assembly is only one part of a manufacturing ecosystem.

The movement of Chinese technicians and equipment connected to Foxconn’s Indian operations showed why that distinction matters. India’s factories can produce sophisticated products while still depending on China for some of the machinery, components and technical expertise that make that production possible.

That creates an important difference between having a factory and controlling the production system behind the factory.

India has made progress on the first.

The second remains unfinished.

This is also why India’s projected $110 billion-plus trade deficit with China in 2025 matters. The deficit is not simply a measure of how much India buys from China. It reflects a deeper industrial imbalance: India still imports many of the intermediate goods, components and capabilities required by its own expanding manufacturing base.

Diplomacy can manage that relationship.

It cannot manufacture the missing industrial capacity.

The G2 problem makes the calculation harder

There is another complication.

India’s dependence on China does not exist in isolation from the relationship between China and the United States.

A more transactional U.S.–China relationship can create a different kind of vulnerability for countries such as India. When the two largest powers negotiate their own economic and strategic relationship, third countries can be affected by decisions in which they had no direct role. The material describes this as a developing “G2 overlay” on the international system.

This matters for India because its strategic environment is increasingly shaped by two relationships at once: its own relationship with China and the broader relationship between China and the United States.

The result is an uncomfortable situation.

India may want to preserve room for manoeuvre between the major powers, but the economic structure of its relationship with China can narrow that room even when its diplomacy remains independent.

As one of the strongest formulations in the material puts it:

“In today’s world, geoeconomics beats geopolitics… Economics now dictates strategy.”

For India, this means foreign-policy autonomy increasingly depends on what exists underneath foreign policy.

Pax Silica can help — but it cannot become another dependency

This is where India’s participation in initiatives such as Pax Silica becomes significant.

The initiative, launched in December 2025, focuses on critical minerals, semiconductors, AI and trusted digital infrastructure, with an explicit objective of reducing “coercive dependencies.” Its membership is concentrated among allied and high-income countries, while India is expected to participate.

For India, the attraction is straightforward.

Building alternative supply chains alone would take years. Partnerships can provide access to technology, investment, processing capacity and alternative sources of critical materials much faster.

But there is a trade-off.

India would enter Pax Silica as a strategic partner rather than a treaty ally. The material identifies a possible “expectation gap”: India could receive access to the network while facing expectations that are different from those placed on countries already embedded in formal alliance structures.

That does not make participation a problem.

It makes the terms of participation important.

India’s objective should not be to replace dependence on China with dependence on a Western coalition. The more useful approach is to use external partnerships to accelerate the domestic capabilities that will eventually give India more choices.

Japan shows how long that takes

Japan provides the most useful comparison.

After China’s 2010 rare earth export halt, Japan did not simply look for another supplier. It combined stockpiling, recycling, overseas investment and alternative supply arrangements, including its partnership with Australia’s Lynas.

The government committed roughly JPY 100 billion in supplemental funding soon after the shock. Over the following fifteen years, Japan reduced its dependence on Chinese rare earths from roughly 90 percent to below 60 percent.

That is an impressive achievement.

It is also a warning against unrealistic timelines.

Japan did not eliminate its dependence through one investment or one new supplier. The reduction came from several measures operating together for more than a decade. JOGMEC, stockpiling, recycling and overseas partnerships all played different roles in reducing exposure.

India’s National Critical Mineral Mission is moving in a similar direction. It combines domestic production, overseas sourcing and a major exploration programme, including a target of 1,200 exploration projects.

But Japan’s experience establishes something important that policy announcements cannot change:

industrial capacity has a clock of its own.

A government can announce a critical-minerals mission in a year.

It cannot create a mature refining industry, technical workforce, supplier ecosystem and recycling network in a year.

Those take time.

The objective is not to choose a camp

This is why India’s strategic-autonomy debate should not be reduced to the question of whether India is moving closer to the United States or away from China.

That is only part of the calculation.

The more important question is whether India can use external partnerships to increase its own range of choices.

Three priorities follow.

First, build processing capacity, not just extraction. India’s roughly 10,000-tonne rare earth processing capacity illustrates the gap between possessing resources and being able to convert them into strategically useful materials.

Second, build the layers beneath final assembly. Machinery, components, technical knowledge and supplier networks matter just as much as the factory where the finished product is assembled. The Foxconn episode demonstrates the vulnerability created when those layers remain externally dependent.

Third, use coalitions as accelerators rather than substitutes for domestic capacity. Pax Silica, the Quad Critical Minerals Initiative and similar arrangements can shorten India’s diversification timeline, but their long-term value lies in helping India build capabilities of its own.

That is a slower strategy.

It is also the one most consistent with strategic autonomy.

Autonomy has to be built

The meaning of strategic autonomy is changing because the foundations of power are changing.

For much of the post-Cold War period, autonomy could be expressed primarily through diplomacy: maintaining relationships with competing powers, avoiding binding alliances and keeping enough room to make independent choices.

Supply-chain competition makes that increasingly difficult.

If China can affect Indian manufacturing through machinery and technical expertise, if critical minerals remain dependent on Chinese processing despite resources existing elsewhere, and if alternative technologies increasingly come through coalitions with their own strategic expectations, then diplomatic freedom depends partly on industrial capacity.

India therefore does not preserve strategic autonomy simply by keeping its distance from major powers.

Nor does it preserve it by moving wholesale into another bloc.

It preserves it by using external relationships to build the capabilities that make external relationships less constraining over time.

That is the real test of the National Critical Mineral Mission, Pax Silica, the Quad and India’s manufacturing programmes.

Their success should not ultimately be measured by the number of agreements India signs or the number of factories it attracts.

It should be measured by whether India has more choices ten years from now than it has today.

Because the most consequential form of strategic autonomy is not the freedom to say no.

It is having built enough capacity that saying no remains economically possible.