Oct 10: Rare Earths Tug-Of-War, India & UK Lock Arms

Much to the glee of Swifties all around the world, Taylor Swift has done it again. Her new album, The Life of a Showgirl, just shattered Adele’s record for biggest first-week sales, moving a jaw-dropping 3.5 million copies in seven days. Taylor doesn’t just top charts; she defines them. Forget The Tortured Poets Department—she’s running her own economic department. The Fed might as well start tracking the “Swift Index”📈 while we sincerely hope to see Adele come back with a hello from the other side 🎤🪩

Now, let’s get into the Dispatch! 🚀

Today’s reading time is 6 mins.

The Indian equity market settled in the green on Thursday, driven by a positive rally in IT, metal, and pharma stocks. Gains were fuelled by optimism over easing Middle East geopolitical tensions and expected renewed foreign investor inflows.

Global Rare Earths Tension: The global race for rare earths—the 17 minerals powering everything from electric vehicles to AI chips and fighter jets—is intensifying. And once again, China holds most of the cards. In April 2025, Beijing jolted the global supply chain by curbing exports of seven rare earth materials and magnets, a move that hit Indian automakers and EV makers hard. Four months later, China lifted those curbs.

India In The Crosshairs: When Chinese Foreign Minister Wang Yi met External Affairs Minister S. Jaishankar in New Delhi, he promised to meet India’s needs for fertilizers, tunnel-boring machines, and rare earths. The timing was no coincidence: just as Wang made his offer, U.S. President Donald Trump announced that “a deal with China is done” to secure full rare earth and magnet supplies—pending final approval with President Xi Jinping, which has not happened.

The “Promise”: China has intensified its rare earth export controls, particularly targeting heavy rare earth magnets critical for defense and semiconductor applications. As part of these measures, Beijing is seeking assurances from India that any magnets supplied will not be re-exported to the United States and will be used solely for domestic purposes.

India’s Strategic Move: To reduce dependence on imports, India is preparing a ₹7,350 crore plan to boost domestic production of rare earth permanent magnets (REPMs). The seven-year initiative aims to establish a full domestic value chain, targeting annual production of up to 6,000 tonnes. The government will support five integrated REPM plants through capital subsidies and sales-linked incentives. Currently, India relies almost entirely on imports to meet its magnet demand, which is expected to double by 2030.

Major Defence Agreement Signed: India and the United Kingdom have signed a £350 million ($468 million) deal under which the Indian Army will receive UK-made missiles. Announced on the second and final day of British Prime Minister Keir Starmer’s first official visit to India, the agreement aims to strengthen India’s air-defence capabilities while supporting the Atmanirbhar Bharat initiative. The deal is expected to directly create over 700 jobs in Northern Ireland—one of the UK’s four constituent nations—according to the UK Ministry of Defence.

Strategic Context: India is the world’s second-largest importer of arms, yet the UK has historically accounted for just over 3% of Indian acquisitions over the past decade. While India has increasingly shifted away from Russian suppliers, countries like France, the US, and Israel have benefited from this pivot. Indian authorities typically prefer government-to-government contracts, whereas the UK has pursued a more commercially-driven approach. The new missile deal represents a step toward long-term collaboration on complex weapons systems.

Thales Lightweight Multirole Missiles: The contract covers Thales Lightweight Multirole Missiles (LMMs), also known as Martlets, developed by Belfast-based Thales Air Defence, and named after a mythical bird from English heraldry that never roosts. Notably, the UK is also supplying LMMs to Ukraine under a separate agreement.

Future Industrial Collaboration: India and the UK have also agreed to develop electric propulsion systems for naval ships in a deal initially worth £250 million. The missile deal and industrial partnerships mark a strengthening of India-UK defence relations, supporting India’s modernization goals, boosting UK employment, and promoting long-term strategic cooperation.

Trump Shelves Tariffs, Boosts Indian Pharma Stocks: The Trump administration has halted plans for tariffs on generic drug imports, providing relief to Indian pharmaceutical companies that supply nearly half of U.S. generic prescriptions. The move averts potential price hikes and shortages for millions of Americans relying on affordable imported medications. India is the largest single source of generic prescription drugs for the U.S. market, surpassing its own domestic producers.

India Pilots Payments Via ChatGPT: The National Payments Corporation of India (NPCI), fintech firm Razorpay, and OpenAI have launched a pilot program enabling e-commerce payments via ChatGPT. Built on top of UPI, users can make purchases directly in the chatbot.

Graphcore To Invest In India’s Chip Sector: SoftBank-owned British chipmaker Graphcore has announced plans to invest $1.3 billion in India over the next decade. The company will establish its first office in Bengaluru, initially hiring 100 AI engineers, with plans to expand to 500 roles within two years.

KisanKraft To Expand Into 50+ Countries: Bengaluru-based KisanKraft plans to expand into over 50 countries. Backed by 13 patents and 19 certifications, it offers locally designed, affordable agri-machinery and climate-resilient seeds. The company promotes adoption through rental models, dealer networks, training, and government subsidies.

India Aims for Global Collaboration on 6G Trials: India is preparing to launch 6G trials, positioning itself as a significant player in next-generation network technologies. At the India Mobile Congress (IMC) 2025, global experts emphasized the nation's growing importance and potential for international collaboration. Japan has expressed keen interest in partnering with India on new services and technologies, aiming to strengthen ties between industries and governments.

Rolls-Royce Expands India Operations: Rolls-Royce plans to make India a major hub for its operations across civil aviation, defence, and energy sectors. The company recently inaugurated its expanded Global Capability and Innovation Centre in Bengaluru, set to be its largest hub.