Mumbai, July 7 (Argus) - India and Indonesia signed an agreement in Jakarta to develop a joint supply chain for key minerals, rare earth magnets, and stainless steel.
These agreements are part of a broader package that upgrades the comprehensive strategic partnership between the two countries in defense, trade, and technology. The state-owned Indian Steel Authority (SAIL) and Indonesia's Krakatau Steel Company established a strategic joint venture to build a stainless steel plant in Indonesia. The value of this transaction has not been disclosed.
The Indian Center for the Development of Colored Materials Technology (NFTDC), domestic company Midwest, and Indonesia's Perminas signed a separate memorandum of understanding to develop rare earth magnets, while another memorandum covers mineral and technology cooperation in the steel supply chain.
This agreement will enhance the resilience of the supply chains in key minerals and steel. Additionally, the new cooperation stage for stainless steel and rare earth magnets is underway.
According to the agreement, India will invest in Indonesia's steel, nickel processing, and rare earth permanent magnet facilities, which are currently dominated by China. India imported 126,365 tons of nickel iron from Indonesia in 2025, while the total import volume was 134,279 tons. According to Global Trade Tracker data, the import volume for January to April this year was approximately 20,245 tons.
Almost all of India's nickel iron is imported from Indonesia. These joint ventures aim to bypass the China-dominated processing network and directly obtain long-term nickel supplies from Indonesia.
China accounts for approximately 90% of the global processing capacity for rare earths, giving China significant influence in industries ranging from clean energy to defense manufacturing. This concentration has driven India, Europe, the United States, Japan, and Australia to sign a series of key mineral agreements in the past year.
During the visit of the Indian Prime Minister to Indonesia, this mining agreement was signed along with other agreements, including the joint development of the missile system, the joint development of the Indonesian port of Sabang near the Strait of Malacca, cooperation on electronic voting machines, and the integration of India's UPI payment system with Indonesia's payment system.
It complements a series of recent agreements, including the India-US Critical Minerals Framework and the four-party initiative to mobilize investment in mining, processing, and recycling, to establish supply chains outside China.
