Military Capability – Air Marshal's Perspective

May 1, 2025April 30, 2025

664: BALANCING COST AND COMBAT CAPABILITY IN FIGHTER JET PROCUREMENT

My article was published in the May edition of the “Life of Soldier” journal.

Balancing affordability and capability in fighter acquisition programs is a complex and intellectually stimulating challenge in defence procurement. Modern fighter jets, with their advanced avionics, stealth technology, and weapons systems, are not just engineering marvels but also strategic assets that can dominate the air, land, and sea. However, these capabilities come at a steep cost, and governments must grapple with budgetary constraints while ensuring their air forces remain capable of addressing current and future threats. There is a need to explore the intricate trade-offs between affordability and capability, examine past successful and unsuccessful programs, and derive best practices for achieving an optimal balance.

Key Factors Influencing Fighter Acquisition Costs

Acquiring modern fighter aircraft is a complex and costly endeavour influenced by a myriad of factors, ranging from technological advancements to geopolitical considerations. Understanding these key factors is essential to comprehending the significant cost variations across different programs and nations.

Research and Development (R&D) Costs. One of the most significant cost drivers in fighter acquisition is R&D. Developing a new generation of aircraft requires extensive research, prototyping, and testing. Stealth technology, advanced avionics, and next-generation propulsion systems demand substantial investment.

Technology and Performance Requirements. The complexity of the technology integrated into a fighter jet directly influences its cost. High-end capabilities such as low observability (stealth), supercruise, advanced radar systems, and electronic warfare (EW) suites add to development and production expenses. The F-22 Raptor, known for its superior air dominance capabilities, became one of the most expensive fighters due to its cutting-edge technology.

Production Scale and Economies of Scale. The number of units produced significantly affects per-unit costs. Larger production runs allow for economies of scale, reducing the per-aircraft cost due to bulk purchasing of materials and more efficient manufacturing. For instance, the US fighter aircraft benefit from a large international procurement base, lowering their unit cost compared to limited-production fighters like the Eurofighter Typhoon or the Dassault Rafale.

Supply Chain and Material Costs. Raw materials, especially those used in composite structures and stealth coatings, impact the cost of fighter jets. Specialised alloys, titanium, and radar-absorbent materials are expensive and often difficult to source. Additionally, supply chain disruptions can inflate costs, as seen during the COVID-19 pandemic and the ongoing Russia-Ukraine and Israel-Hamas wars.

Workforce and Manufacturing Expertise. Highly skilled labour is required to assemble sophisticated aircraft. Countries with a well-established aerospace industry, such as the United States, France, and Russia, have the necessary expertise, but labour costs can vary. As seen in the F-35 production process, advanced automation and AI-driven manufacturing techniques can help reduce labour expenses over time.

Customisation and Export Modifications. Export variants of fighter aircraft often undergo modifications to meet the specific needs of the purchasing nation. These modifications can increase costs, such as different avionics, weapons compatibility, or structural changes. The Rafale, for example, had many India-specific features, leading to increased costs.

Lifecycle and Maintenance Costs. Beyond the initial acquisition, the total cost of ownership includes maintenance, spare parts, and upgrades over the aircraft’s lifespan. High-maintenance aircraft like the F-22, which require specialised maintenance for stealth coatings, can have significant long-term costs. On the other hand, modular designs and open-system architectures aim to keep maintenance costs lower.

Geopolitical and Strategic Considerations. Strategic alliances and political considerations often influence defence procurement. Countries that purchase fighters from allies may receive discounts or financing assistance as part of broader defence agreements. Conversely, embargoes or restrictions on technology transfers can drive up costs if alternative solutions are required. This underscores the need for foresight and strategic planning in defence procurement.

Trade-Offs in Fighter Acquisition Programs

Managing the intricacies of fighter aircraft procurement is vital to defence planning. Military leaders and policymakers must meticulously weigh performance, cost, operational requirements, and strategic objectives to maximise capabilities while staying within budgetary limits.

Balancing Cost and Performance. Acquiring fighter aircraft requires a delicate balance between cost and capability. While advanced fifth-generation fighters provide unmatched performance, they have high acquisition and operational expenses. More affordable alternatives may lack cutting-edge features but offer viable options for air forces with budget constraints. Governments must determine whether to invest in cutting-edge technology or build a more extensive fleet with slightly reduced capabilities.

Multirole Efficiency vs. Specialised Superiority. Modern fighters like the F-35 and Rafale are designed as multirole platforms capable of handling air-to-air combat, ground attacks, and electronic warfare. This reduces fleet diversity but may lead to trade-offs in specialised missions. Decision-makers must evaluate whether a single versatile platform meets their operational needs or if specialised aircraft are necessary for optimal effectiveness.

Domestic Production vs. Foreign Procurement. Nations must choose between developing indigenous fighter programs and purchasing aircraft from foreign suppliers. Domestic programs, such as India’s Tejas and South Korea’s KF-21, foster self-reliance but require extensive research and industrial infrastructure investment. In contrast, buying foreign aircraft ensures immediate capability but may create dependency on external suppliers for maintenance and upgrades.

Short-Term Gains vs. Long-Term Development. Some countries prioritise acquiring ready-made fighter jets to achieve immediate operational capability, while others invest in long-term development programs. Purchasing off-the-shelf platforms minimises short-term risks but may lead to obsolescence. On the other hand, long-term investments in projects like the Tempest and NGAD aim to ensure future technological superiority, albeit with higher financial and developmental risks.

Expanding Fleet vs. Cutting-Edge Technology. Budgetary constraints force militaries to choose between maintaining a more extensive fleet of less advanced aircraft or acquiring fewer high-tech fighters. A more comprehensive fleet provides excellent operational coverage, while fewer advanced jets offer superior combat capabilities. Many air forces supplement their expensive stealth fighters with more affordable fourth-generation aircraft to maintain a balance between numbers and technology.

Quantity vs. Capability Trade-offs. Nations must decide between acquiring a limited number of highly advanced fighters or a more extensive fleet of less sophisticated aircraft. For example, the U.S. supplemented its elite F-22 fleet with the more affordable F-35, while countries like China and Russia prioritise quantity to ensure strategic depth. This decision impacts force projection and overall combat effectiveness.

Case Studies

Various nations have adopted different strategies to achieve balance, ensuring operational effectiveness while managing costs.

F-16 Fighting Falcon (USA): Cost-Effective Multirole Performance. The F-16, developed in the 1970s, exemplifies how an affordable fighter can remain relevant through continuous upgrades. Originally designed as a lightweight, cost-effective platform, the F-16 has evolved with advanced avionics, radar, and weapon systems. By leveraging modular upgrades, nations operating the F-16 have extended their service life and capability without incurring the costs of entirely new aircraft programs. Its global success—operated by over 25 countries—demonstrates the financial benefits of export-oriented design.

JAS 39 Gripen (Sweden): Affordability through Smart Design. Sweden’s Saab JAS 39 Gripen was designed with cost efficiency in mind. Unlike competitors, the Gripen integrates an open-architecture system that allows easy upgrades, reducing long-term costs. Its reliance on off-the-shelf components, including an American engine and European avionics, lowers development expenses while maintaining high performance. The Gripen’s ability to operate from austere airfields and use cost-efficient maintenance procedures further enhances affordability. Its export success in countries like Brazil and South Africa has helped distribute costs across multiple buyers.

Eurofighter Typhoon (Europe): Multinational Cost Sharing. The Eurofighter Typhoon demonstrates how multinational collaboration can spread development costs while delivering a high-performance aircraft. Shared investment among Germany, the UK, Italy, and Spain allowed the Typhoon to integrate advanced capabilities while mitigating financial burdens on individual nations. Although initially expensive, its long-term sustainment plan ensures affordability through incremental modernisation.

Chengdu J-10 (China): Indigenous Development with Cost Control. China’s Chengdu J-10 was developed as an affordable, indigenous alternative to foreign fighters. China minimised costs by relying on domestic production and technology transfer from Russian sources while achieving a capable multirole aircraft. Continuous upgrades, including the J-10C variant with AESA radar and advanced avionics, have kept the platform competitive without excessive investment in entirely new designs.

Sukhoi Su-30 (Russia): Adaptability and Cost Efficiency. The Su-30 series is a prime example of how Russia balances affordability with performance. Initially derived from the Su-27, the Su-30 has been continuously upgraded to include advanced avionics, thrust-vectoring engines, and long-range strike capabilities. Its affordability and strong export potential have made it a staple in air forces worldwide, including India, Algeria, and Vietnam.

HAL Tejas (India): Indigenous Fighter Development for Cost-Effectiveness. India’s HAL Tejas was developed to reduce reliance on foreign fighters while maintaining affordability. Designed with modular upgrades in mind, the Tejas has gradually improved with better radar, weapons integration, and avionics. Despite delays in development, its affordability compared to Western counterparts has made it an attractive option for India’s long-term air power strategy.

KAI FA-50 (South Korea): Light Fighter for Affordability and Export Success. South Korea’s KAI FA-50, based on the T-50 trainer, is a cost-effective light fighter designed for domestic and export markets. With modern avionics and weapons compatibility, the FA-50 offers a budget-friendly solution for nations requiring a capable yet affordable jet. Its success in markets like the Philippines and Poland highlights its balance of affordability and capability.

Best Practices for Balancing Affordability and Capability

Balancing affordability and capability in fighter acquisition programs is a complex but essential task for modern air forces. Governments must ensure that their aircraft provide operational effectiveness without exceeding budgetary constraints. The following best practices help achieve this balance.

Lifecycle Cost Management. The total cost of a fighter aircraft extends beyond its initial purchase price. Governments must factor in long-term expenses such as maintenance, upgrades, and eventual disposal. A comprehensive lifecycle cost analysis prevents budget overruns and ensures the financial sustainability of an air force over decades of service.

Continuous Modernisation Strategies. Modern fighter aircraft benefit from modular systems and open architectures that enable incremental upgrades. The F-16 Fighting Falcon, for instance, has remained operational since the 1970s due to continuous improvements in avionics, radar, and weapons. This strategy extends an aircraft’s service life while spreading costs over time, reducing the need for costly replacements.

Leveraging Partnerships. Multinational collaborations in fighter development and production help distribute costs among participating nations. Programs like the F-35 Joint Strike Fighter and the Eurofighter Typhoon demonstrate shared investment’s financial and technological benefits. By pooling resources, nations reduce individual financial burdens while gaining access to cutting-edge technology.

Maximising Multi-Role Capabilities. Multi-role fighters enhance operational flexibility by performing diverse missions within a single platform. The Dassault Rafale exemplifies this approach, excelling in air combat, ground attack, and reconnaissance. Such versatility allows air forces to reduce reliance on multiple aircraft types, simplify logistics, and lower maintenance costs.

Enhancing Export Potential. Designing fighters with exportability in mind helps amortise development costs and lower per-unit expenses. Countries that successfully market their fighter jets internationally can reinvest revenues into further technological advancements, strengthening their domestic defence industry.

Robust Program Management. Effective oversight and clear program objectives are crucial to avoiding cost overruns and scope creep. Strong governance, transparent communication, and disciplined financial management ensure that fighter programs stay within budget while meeting operational requirements. The U.S. Air Force’s Next Generation Air Dominance (NGAD) program has emphasised digital engineering to streamline development and prevent cost escalation.

Embracing Emerging Technologies. Advancements in technology are reshaping how air forces balance affordability and capability. The following innovations are improving cost efficiency while enhancing combat effectiveness.

The Role of Unmanned Systems. Unmanned aerial vehicles (UAVs) and “loyal wingman” drones complement traditional fighter jets by undertaking high-risk missions at a lower cost. These systems enhance reconnaissance, electronic warfare, and combat operations, reducing pilot exposure to danger. Programs like the Boeing MQ-28 Ghost Bat highlight the increasing integration of UAVs into modern air combat strategies.

Digital Engineering. Digital twins and model-based systems engineering accelerate fighter development and reduce costs. Digital prototypes allow designers to test and refine aircraft designs in virtual environments before physical production begins.

Additive Manufacturing. 3D printing, or additive manufacturing, streamlines the production of complex aircraft components, reducing material waste and manufacturing time. This technology enables rapid part replacement, minimising downtime and sustainment costs. Fighter manufacturers increasingly use 3D printing to enhance affordability without sacrificing performance.

AI-Driven Warfare. Artificial intelligence (AI) transforms modern fighter capabilities by improving decision-making, enhancing situational awareness, and reducing pilot workload. AI-powered mission planning and adaptive combat algorithms enable greater efficiency and operational effectiveness, potentially lowering training costs and increasing mission success rates.

Conclusion

Balancing affordability and capability in fighter acquisition programs is a complex but essential endeavour. As nations face evolving threats and fiscal constraints, the ability to make strategic trade-offs will determine the effectiveness of their air power. By embracing innovative technologies, fostering international collaboration, and adopting robust program management practices, governments can achieve an optimal balance that ensures operational readiness and financial sustainability. The lessons from past programs and emerging trends guide navigating this challenging landscape.

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Disclaimer:

Information and data included in the blog are for educational & non-commercial purposes only and have been carefully adapted, excerpted, or edited from reliable and accurate sources. All copyrighted material belongs to respective owners and is provided only for wider dissemination.

References:-

Arena, M. V., Blickstein, I., Younossi, O., & Grammich, C. (2008). Why Has the Cost of Fixed-Wing Aircraft Risen? RAND Corporation.

Lorell, M. A. (2003). Going Global? U.S. Government Policy and the Defence Aerospace Industry. RAND Corporation.

Tirpak, J. A. (2020). “How Much Should a Fighter Cost?” Air Force Magazine.

Trimble, S. (2018). “F-15EX vs. F-35A: The Debate Over Air Superiority Affordability.” FlightGlobal.

Shalal, A. (2021). “Cost vs. Capability: U.S. Air Force Considers Future Fighter Mix.” Reuters.

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Sweetman, B. (2014). The F-35 Lightning II: From Concept to Cockpit. Zenith Press.

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April 30, 2025

663: ROLE OF AMERICA’S F-47 SIXTH-GENERATION FIGHTER JET IN A SHIFTING DEFENCE LANDSCAPE

My Article was published in the May edition of the “Life of Soldier” journal.

The evolution of military aviation has reached a revolutionary moment with the advent of sixth-generation fighter jets. These jets, representing a transformative leap in military aviation, are set to redefine air combat with their revolutionary technologies like advanced stealth, artificial intelligence (AI), hypersonic speeds, and networked warfare capabilities. As nations like the United States and China race to develop these next-generation platforms, the global balance of power is shifting, with significant implications for countries like India. This article explores what constitutes a sixth-generation fighter, delves into the specifics of the US’s Next Generation Air Dominance (NGAD) platform, compares it to the existing F-22, and assesses its potential to transform US defence. It also examines the intensifying US-China defence rivalry and India’s current standing amidst these global developments.

Sixth-Generation Fighter Jet

A sixth-generation fighter jet is the next evolutionary step beyond the current fifth-generation aircraft, such as the U.S.’s F-22 Raptor and F-35 Lightning II, the Russian SU-57 and the Chinese J-20. While fifth-generation jets introduced advanced stealth, supercruise (sustained supersonic flight without afterburners), and integrated sensor systems, sixth-generation fighters aim to push the boundaries further. Their defining features include:-

Enhanced Stealth. These jets will have an even lower radar cross-section than their predecessors, using advanced materials, coatings, and aerodynamic designs to become nearly invisible to enemy detection systems.

Artificial Intelligence (AI). AI will be deeply integrated, enabling real-time decision-making, autonomous operations, and coordination with unmanned systems, such as drones acting as “loyal wingmen.”

Hypersonic Speeds. Capable of exceeding Mach 5, these aircraft could drastically reduce response times and enhance their ability to penetrate contested airspace.

Directed-Energy Weapons. Innovations like laser systems could provide precise, cost-effective means to neutralise threats like missiles or enemy aircraft.

Advanced Networking. Sixth-generation jets will operate as nodes in a vast battlefield network, sharing data with satellites, ground stations, and other platforms to achieve total situational awareness.

Advanced Avionics and Sensors. They would incorporate superior sensor fusion for unparalleled situational awareness.

Optionally Manned Capabilities. These fighters will be flexible enough to operate with or without a pilot, adapting to mission requirements.

These capabilities mark a shift from traditional air combat to multi-domain warfare, a concept in which air, space, cyber, and electronic domains are seamlessly integrated. This integration allows for a more comprehensive approach to warfare, focusing on dominating future conflicts through technological superiority and adaptability.

Speciality of the U.S.’s “F-47” Fighter Jets & Differences from the Existing F-22.

The F-22 Raptor, operational since 2005, is a fifth-generation stealth air superiority fighter renowned for its agility, stealth, and advanced avionics. However, after two decades, it faces limitations in an evolving threat era. The NGAD is envisioned as a “family of systems” rather than a single aircraft, comprising a manned fighter and supporting unmanned drones. It will differ significantly. The NGAD (F-47) fighter’s specialities would include:-

Next-Level Stealth. The F-22’s stealth is exceptional, but the NGAD will likely use next-generation materials and designs to achieve even greater invisibility, including against emerging radar technologies. Building on the F-22’s stealth technology, the NGAD will likely incorporate broadband stealth, reducing detectability across a broader range of radar frequencies.

AI and Autonomy. The F-22 relies on human pilots for all decisions, whereas the NGAD will integrate AI to handle complex tasks, potentially reducing pilot workload or enabling autonomous missions. The jet may feature AI systems that manage flight, combat, and coordination with unmanned drones, potentially allowing for unmanned variants.

Hypersonic Capability. The F-22 can supercruise at Mach 1.5, but the NGAD may reach hypersonic speeds (Mach 5+), vastly improving its ability to strike and evade. While specifics are classified, the NGAD could achieve speeds far exceeding the F-22’s Mach 1.5 supercruise, possibly entering the hypersonic realm.

System Integration. The F-22 has limited data-sharing capabilities compared to the NGAD, which will operate within a highly networked environment, linking with other assets for real-time battlefield awareness. The NGAD is not just a standalone aircraft but part of a broader “family of systems,” including drones, advanced sensors, and cyber tools, all working together to dominate the battlespace. The NGAD could control or be supported by unmanned drones, expanding its operational flexibility.

Range, Endurance and Payload. The F-22 has a range of approximately 1,850 miles with external tanks, whereas NGAD is engineered for greater range, endurance and potentially larger weapon capacity. It will be designed for long-range missions critical for operations in expansive regions like the Indo-Pacific.

Flexible Architecture. Its modular design could enable rapid upgrades and mission-specific configurations, ensuring longevity and adaptability. The NGAD is a forward-looking platform designed for future warfare, while the F-22, though formidable, reflects the priorities of an earlier era. These features position the NGAD as a revolutionary platform designed to address the challenges of modern warfare against technologically advanced adversaries.

Likely Game Changer for U.S. Defence

The Next-Generation Air Dominance (NGAD) program can redefine U.S. defence strategy, ushering in a new era of air superiority, enhanced deterrence, and reinforced multi-domain integration. The anticipation and excitement surrounding this potential transformation are palpable.

Air Superiority. The NGAD is designed to outperform near-peer adversaries like China’s J-20 and Russia’s Su-57. Its cutting-edge stealth, enhanced range, and AI-driven capabilities will allow the U.S. to dominate contested airspaces, even in heavily defended environments.

Deterrence. A formidable leap in air combat technology, the NGAD will discourage potential adversaries from challenging U.S. air dominance. Knowing they face a next-generation fighter capable of overwhelming their defences, adversaries may be deterred from aggressive actions.

Multi-Domain Dominance. The NGAD is not just a fighter but a networked system that integrates with space, cyber, and land-based forces. This interconnectivity allows it to act as a force multiplier, relaying battlefield intelligence and coordinating attacks with other assets, thus extending its impact far beyond traditional air combat.

Air Dominance. Successfully fielding the NGAD will ensure U.S. air dominance and reaffirm the nation’s position as the global leader in military innovation. Its advancements in AI, unmanned teaming, and next-gen propulsion could have spillover benefits for civilian aerospace, cyber warfare, and autonomous systems, instilling a sense of pride and confidence in the audience.

Despite its promise, the NGAD faces significant hurdles, including a projected per-unit cost of hundreds of millions of dollars and the challenge of integrating multiple breakthrough technologies. However, if these obstacles are overcome, the NGAD will shape the future of U.S. airpower for decades, ensuring its dominance in a rapidly evolving strategic landscape.

China’s Sixth-Generation Stealth Fighter and U.S.-China Competition.

China is also advancing its sixth-generation stealth fighter, with reports of prototypes being sighted. China’s program remains shrouded in secrecy, and the details are limited. The recent flying of sixth-generation prototypes suggests it is committed to matching or surpassing U.S. capabilities. This development coincides with the U.S. Pentagon’s NGAD efforts, highlighting fierce competition between these two powers.

Both nations are pouring resources into AI, hypersonics, and stealth, aiming to deploy sixth-generation fighters first and gain a strategic edge. A sixth-generation jet would enhance China’s influence in the Asia-Pacific, particularly in disputed areas like the South China Sea and near Taiwan. The U.S.-China rivalry extends beyond military hardware, shaping economic and diplomatic alignments worldwide. This competition drives rapid innovation and escalates tensions, with both nations seeking to outpace each other in defence technology. This close contest shapes global defence dynamics, influencing nations like India.

Impact on India

The US-China rivalry in sixth-generation fighters has significant implications for India, which faces opportunities and challenges. India faces threats from China and Pakistan, both of which are modernising their air forces. A Chinese sixth-generation fighter could tip the balance in regional conflicts, pressuring India to modernise its air force. India must counter Beijing’s growing military strength. India balances ties with the US and Russia while pursuing indigenous programs.

India’s airpower combines legacy and modern systems, reflecting its multi-source procurement strategy. It includes Russian Su-30MKI, MiG-29, French Mirage-2000, Rafale and indigenous Tejas fighters. The AMCA aims to deliver fifth-generation capabilities, though it’s still years from operational service. India’s fleet is smaller and comparatively less advanced, lacking operational fifth-generation fighters. It trails in AI, stealth, and hypersonic research. India is modernising through foreign purchases (Rafale), indigenous efforts (Tejas Mk2, AMCA), and partnerships with the U.S., France, and Israel. Limited resources spread across multiple programs hinder rapid progress. However, it must accelerate to keep pace with its rivals.

India’s reliance on Russian aircraft and systems risks U.S. sanctions, straining its ties with Washington despite a growing partnership. India must diversify its defence suppliers to reduce foreign dependence while boosting indigenous programs like the Advanced Medium Combat Aircraft (AMCA). The U.S.-China race underscores the urgency for India to enhance its technological and military capabilities to safeguard its interests.

India has defence deals with the U.S., but has not purchased U.S. fighter jets. Discussions about acquiring the F-35 Lightning II, a fifth-generation stealth fighter, are being speculated. The F-35 could bolster its air force, but its expense and restrictions might divert resources from the AMCA, India’s fifth-generation fighter in development. With China advancing rapidly, India cannot afford delays but needs a cost-effective, strategically aligned solution.

The NGAD, however, remains a U.S.-exclusive program, a highly classified initiative focused on developing a sixth-generation fighter for the U.S. Air Force. Its sensitive technologies and strategic importance make it unlikely to be shared with foreign partners soon.

Conclusion

As exemplified by the U.S.’s NGAD and China’s emerging platform, sixth-generation fighter jets are set to redefine air combat with unprecedented technology. For the U.S., the NGAD will ensure air dominance, while China’s efforts signal its rise as a military superpower. India, caught between these giants, faces a complex path. It lacks direct involvement with NGAD but must leverage U.S. ties, navigate CAATSA, and decide on deals like the F-35, all while pushing indigenous development.

India’s air power is at a crossroads in a world of rapid geopolitical and technological change. Modernisation is underway, but closing the gap with China will require strategic focus, investment, and innovation. The sixth-generation race is not just about jets—it’s about the future of warfare, and India must position itself to thrive in this new era.

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Disclaimer:

Information and data included in the blog are for educational & non-commercial purposes only and have been carefully adapted, excerpted, or edited from reliable and accurate sources. All copyrighted material belongs to the respective owners and is provided only for wider dissemination.

References:-

Krepinevich, Andrew. The Evolution of Air Dominance: Sixth-Generation Fighters and the Future of Air Combat. Center for Strategic and Budgetary Assessments, 2023.

Gunzinger, Mark, and Bryan Clark. The Role of NGAD in Sustaining U.S. Air Superiority in the Pacific. Center for Strategic and International Studies, 2024.

RAND Corporation. Next-Generation Fighter Aircraft: Strategic Considerations for the U.S. Air Force. RAND, 2023.

Mehta, Aaron. U.S. Airpower in the Indo-Pacific: The NGAD’s Role in Detering China. Atlantic Council, 2024.

Callaghan, John. “Sixth-Generation Fighter Jets and the Shift in U.S. Defence Strategy.” Journal of Strategic Studies 47, no. 1 (2024): 33-58.

Holbrook, Sarah. “AI and Human-Machine Teaming in Next-Gen Fighters: Tactical Advantages and Challenges.” Air & Space Power Journal 38, no. 2 (2023): 45-70.

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April 24, 2025April 21, 2025

658: RARE EARTH AS RARE WEAPON: INDIA’S OPPORTUNITY, AND CHALLENGE

My Article was published on the Eurasian Times website

on 21 Apr 25.

On 04 April 2025, China imposed export controls on seven REEs (samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium) and rare earth magnets, requiring special export licenses. This move, a retaliation to U.S. tariffs as high as 145%, has halted shipments from Chinese ports, severely impacting U.S. industries like defence, electric vehicles, and medical technology.

The U.S. relies heavily on China for REEs, with over 50% of its critical minerals sourced there. China’s restrictions threaten U.S. defence (F-35 jets, missiles), tech (smartphones, AI chips), and healthcare (MRI machines, cancer treatments). Analysts warn of shortages, price hikes, and delays, with some companies facing permanent supply cuts.

Rare earth elements (REEs), a group of 17 chemically similar elements including scandium, yttrium, and the 15 lanthanides, are critical to modern technology. Often dubbed the “vitamins of modern industry,” REEs are indispensable, from smartphones and electric vehicle batteries to advanced military systems and renewable energy infrastructure. However, their supply chain is heavily concentrated, with China dominating global production and processing. This dominance has transformed rare earths into a potent geopolitical tool, particularly in trade wars, most notably between the United States and China.

For India, a country rich in rare earth potential but limited in production and processing capacity, this presents an urgent strategic opportunity and a daunting set of challenges. As the global balance of power shifts, New Delhi must rethink its resource security strategy, especially in the context of the U.S.-China rivalry and the growing importance of resilient supply chains.

Rare Earths: Strategic Importance

Rare earth elements comprise a group of 17 chemically similar metals: the 15 lanthanides, scandium, and yttrium. Despite their name, these elements are relatively abundant in the Earth’s crust but rarely found in concentrated forms economically viable to mine. Their unique magnetic, luminescent, and electrochemical properties make them indispensable to various high-tech applications.

- Neodymium is essential for high-performance magnets in electric motors, drones, and wind turbines.
- Europium and terbium are used in fluorescent and LED lighting.
- Lanthanum is used in camera lenses and hybrid vehicle batteries.
- Yttrium finds applications in radar and superconductors.
- Gadolinium and terbium are critical for military sensors, sonar systems, and advanced imaging technologies.
- Cerium and lanthanum are used in catalysts for refining petroleum.

The global demand for REEs has surged with the rise of green technologies and digital economies. The International Energy Agency projects that demand for specific REEs, like neodymium, could increase tenfold by 2040 to meet net-zero emissions goals. As of 2022, the global rare earth market was valued at approximately USD 3.9 billion, and is expected to reach USD 9.6 billion by 2030, growing at a CAGR of over 10% annually due to rising demand from clean energy and defence sectors (Fortune Business Insights, 2023).

China’s Dominance in the Global Rare Earth Chain

China’s strategic approach to rare earths began in the 1980s. Offering low prices and absorbing environmental costs drove many competitors out of the market, especially in the U.S., Australia, and India. 1992 Deng Xiaoping famously stated, “The Middle East has oil. China has rare earths.” This foresight has translated into geopolitical leverage.

According to the U.S. Geological Survey, in 2022, China accounted for approximately 70% of global rare earth mining, over 90% of refining and processing, and 90% of rare earth permanent magnet manufacturing (International Energy Agency, 2021). This concentration gives China significant leverage in international trade disputes.

Rare Earths in Trade War

The U.S.-China trade war, which escalated in 2018 under the Trump administration, saw tariffs, export controls, and technological decoupling dominate bilateral relations. Rare earths quickly emerged as a flashpoint. In 2010, China briefly restricted rare earth exports to Japan during a territorial dispute, causing global prices to spike and exposing the risks of supply chain dependence. This incident foreshadowed China’s willingness to use REEs as a bargaining chip.

In 2019, amid escalating trade tensions, Chinese state media hinted at curbing rare earth exports to the United States. President Xi Jinping’s visit to a rare earth processing facility in Jiangxi province was widely interpreted to signal China’s readiness to leverage its dominance. The U.S., heavily reliant on Chinese REEs for commercial and military applications, faced a stark vulnerability. For example, the F-35 fighter jet program depends on rare earth magnets, and any disruption could halt production.

China’s control extends beyond raw materials to the processing and manufacturing of REE-based components. Even if other countries mine rare earths, they often send them to China for refining due to its advanced infrastructure and lower costs. This creates a choke point that China can exploit during trade disputes. In 2023, China introduced export controls on certain rare earth technologies, further tightening its grip and prompting concerns about supply chain security. On April 4, 2025, China imposed new export restrictions on seven critical medium and heavy rare earth elements.

Economic and Geopolitical Implications

The weaponisation of rare earths has far-reaching consequences. For importing nations, supply disruptions can cripple industries, inflate costs, and delay technological advancements. In 2010, Japan’s automotive and electronics sectors faced production delays due to China’s export restrictions. Similarly, a sustained cut off to the U.S. could disrupt everything from consumer electronics to defence manufacturing.

For China, rare earths are a double-edged sword. While they provide leverage, overusing this tool risks alienating trading partners and accelerating efforts to diversify supply chains. China’s domestic demand for REEs is also rising, particularly for its electric vehicle and renewable energy sectors, which could limit its ability to restrict exports without harming its economy.

Globally, the rare earth trade war underscores the fragility of critical mineral supply chains. Countries like Australia, Canada, and the European Union have recognised the need for resilience, but building alternative supply chains requires significant investment and time. Environmental regulations and high capital costs further complicate efforts to scale up mining and processing outside China.

India’s Untapped Potential

India is not immune to this dynamic. Although it holds the fifth-largest rare earth reserves in the world, estimated at 6.9 million tonnes (USGS, 2023), India contributes only around 1% of global rare earth production. This is due to regulatory, environmental, and infrastructure barriers.

Opportunities for India. The U.S. and its allies actively seek to reduce their reliance on China for REEs. This allows India to become an alternative supplier, particularly in downstream value chains like magnets, batteries, and high-end components. A robust rare earth industry could enhance India’s economic security and bargaining power in international diplomacy. It can also reduce import dependency for key sectors such as defence and renewable energy. Developing a domestic rare earth value chain can create high-skilled jobs and foster innovation in materials science, metallurgy, and green technologies, which are critical for India’s future economic growth. India’s monazite deposits are rich in thorium, a potential future fuel for nuclear reactors. While radiological concerns complicate extraction, if thorium-based reactors become viable, they could offer a strategic advantage.

India’s Approach. India’s rare earth sector is primarily led by Indian Rare Earths Limited (IREL), a public sector entity under the Department of Atomic Energy. The National Critical Minerals Mission, launched in 2024, aims to bolster domestic production. IREL plans to quadruple its mining capacity to 50 million tonnes annually by 2032, increasing REE output from 5,000 to 15,000 tonnes. Investments in processing and separation facilities aim to address India’s lag in midstream capabilities, though technical expertise remains a bottleneck.

- Policy Reforms and Liberalisation. In 2023, India initiated policy changes to attract private players into critical mineral exploration. The Mines and Minerals (Development and Regulation) Amendment Act now allows private companies to bid to explore critical minerals, including REEs (Ministry of Mines, 2023). This is a significant shift from the earlier state-dominated regime.

- Bilateral and Multilateral Cooperation. India has begun forging rare earth supply chain partnerships with like-minded democracies. Under the India-Australia Critical Minerals Investment Partnership, India has committed to co-invest in Australian REE projects. It also explores partnerships with the U.S., Japan, and the EU under the Mineral Security Partnership (MSP).

- Research and Development. India has stepped up R&D through institutions like the Bhabha Atomic Research Centre (BARC) and the Council of Scientific and Industrial Research (CSIR) to develop indigenous REE extraction and separation technologies. Still, the gap in advanced metallurgy and processing know-how remains wide.

- Strategic Stockpiling. India is considering creating strategic reserves for critical minerals similar to those for crude oil. This would buffer supply disruptions, although implementation remains in the early stages.

Challenges Ahead. REE extraction is environmentally damaging and involves toxic waste. India lacks the robust regulatory and technological frameworks to mitigate these hazards, especially given the proximity of mineral-rich areas to ecologically sensitive zones. While mining is a start, the real value lies in processing and manufacturing advanced REE products like permanent magnets. India currently lacks world-class facilities and expertise in this area. Despite recent reforms, bureaucratic red tape, conflicting regulations, and slow implementation continue to plague India’s mining sector. A coherent, industry-friendly policy framework is essential. India’s non-aligned posture and cautious diplomacy can sometimes limit its ability to align with Western-led initiatives fully. Balancing its strategic autonomy while engaging in rare earth diplomacy will be delicate.

Recommendations

Establish a National Critical Minerals Mission, modelled on the success of the Solar Mission, which can bring together ministries, PSUS, private firms, and academia to develop a holistic roadmap.

Encourage joint ventures and public-private partnerships with technologically advanced nations, which can help overcome India’s processing deficiencies.

Incentivise Green Mining and Processing, to ensure sustainability, the use of cleaner technologies and strict environmental guidelines must be incentivised.

Invest in specialised training for mineral extraction, metallurgy, and environmental management to create a workforce for the REE sector.

Prioritise Mining and Processing, focusing on developing mining and midstream capabilities before investing in magnet production and leveraging international partnerships for technology.

Incentivise Private Investment by offering tax breaks and subsidies to attract private capital, addressing IREL’s monopoly legacy.

Expand Strategic Reserves and increase REE stockpiles to buffer against supply disruptions, learning from China’s 2024 embargo.

Conclusion

Rare earths are no longer just a matter of economic competitiveness but a pillar of strategic autonomy. They have become a powerful weapon in the U.S.-China trade war, reflecting the broader struggle for technological and financial supremacy. China’s dominance in the REE supply chain gives it significant leverage but also exposes the vulnerabilities of importing nations. Diversifying, recycling, and innovating are critical to reducing this dependence; however, they require time, investment, and international cooperation. As the world transitions to a greener, tech-driven future, securing a stable supply of rare earths will remain a geopolitical priority. The outcome of this struggle will shape trade relations and the global race for technological leadership.

For China, rare earths are a weapon; for the United States, a vulnerability; and for India, an opportunity. By seizing this moment, India can transform its rare earth sector from a dormant asset into a force multiplier, positioning itself as a consumer and a producer of the materials that will define the 21st century. India’s rare earth diplomacy and trade warfare strategy hinge on leveraging its vast reserves, forging international partnerships, and navigating geopolitical complexities. Opportunities to reduce global reliance on China, boost economic growth, and advance technology are significant, but technical, environmental, and financial challenges persist. By prioritising mining and processing, incentivising private investment, and deepening global alliances, India can establish itself as a pivotal player in the REE supply chain, aligning with its ambition to become a developed nation by 2047.

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Rare Earth As Rare Weapon! Amid US-China ‘Nasty’ Trade War, How Can India Use It’s ‘Dormant Asset’ To Assert Dominance

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References:-

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