India stands at a critical juncture with rare earth elements (REEs), which have emerged as the cornerstone of the next industrial revolution. Harnessing these resources offers India not merely a strategic advantage but a civilizational leap—linking natural endowments with technological prowess, investment, and entrepreneurship to gain long-term sovereignty, autarky, and influence in the global order.

REEs, comprising seventeen elements including neodymium, dysprosium, terbium, europium, and yttrium, are the essential ingredients underpinning transformative industries. Their utility spans from precision-guided missiles and satellite systems to electric vehicle (EV) motors, wind turbines, solar panels, semiconductors, smartphones, and high-performance magnets such as Neodymium-Iron-Boron (NdFeB). Cerium and lanthanum drive catalysts and ceramic production, europium and terbium are vital for display technology and lasers, and no modern nation can claim true strategic autonomy without assured access to these minerals.

India: Resource Potential Vs Output Reality

India boasts the third-largest rare earth reserves globally, with an estimated 6.9 million metric tonnes of rare earth oxides, predominantly within the monazite-rich sands of Kerala, Tamil Nadu, Andhra Pradesh, Odisha, and West Bengal. However, its annual production remains minuscule—around 2,900 tonnes in 2023-24, less than one percent of global output, ranking it eighth or ninth worldwide, well behind China, the United States, and Australia. India’s imports of rare earth magnets surged to nearly 54,000 tonnes in FY25 from just over 12,000 tonnes four years earlier—an indication of the urgent gap between resource availability and value addition.

Global Dynamics And The Strategic Imperative

A significant driver for India's rare earth ambitions is the increasing fragility and politicisation of global REE supply chains. China has demonstrated its readiness to weaponize its dominant position—controlling over 70% of production and nearly 90% of processing capacity—by restricting exports in diplomatic disputes and tightening licensing on critical elements like terbium and dysprosium. Further, China is deepening its reach into politically unstable regions rich in REEs, raising the stakes in what many observers describe as the “Great Game” of mineral geopolitics.

India’s Policy Push And Institutional Reforms: Recognising The Urgency, The Government Has Launched An Array of Initiatives:

Customs Reforms: Removal of duties on 25 critical minerals in 2024-25, extending further exemptions to cobalt, lithium-ion battery scrap, zinc, and others in 2025-26 as part of a strategy to foster domestic value-added manufacturing.

Mining Liberalisation: Amendments to the Mines and Minerals Act in 2023 have opened non-radioactive rare earths and lithium to commercial mining, with auctions for 24 critical mineral blocks and 13 new exploration licences granted.

National Critical Mineral Mission (NCMM): This mission, adopting a whole-of-government approach with a planned budget of ₹16,300 crore plus ₹18,000 crore in public and private investment, aims to support 1,200 exploration projects, build five stockpiles, four processing hubs, and facilitate overseas acquisitions by 2030-31.

Production-Linked Incentives: The Ministry of Heavy Industries has allocated ₹1,345 crore to boost rare earth magnet manufacturing, targeting 4,000 tonnes of NdFeB and samarium-cobalt magnets by 2030.

Recycling And Urban Mining: Private firms like Attero Recycling aim to scale rare earth recovery from e-waste and spent batteries to 30,000 tonnes by 2026. PLI schemes are being designed to incentivise this emerging ecosystem.

Building Comprehensive Capability: Challenges And Bottlenecks

Despite these reforms, India’s industrial ecosystem for rare earths remains incomplete:

Limited Refining And Processing: Most facilities remain at the oxide or primary extraction stage; value-added steps such as alloy and magnet production are nascent and fragmented.

Regulatory Constraints: The Atomic Energy Act of 1962 limits private sector access to monazite due to thorium’s radioactive content, reserving most beach sand mining for public sector enterprises like IREL. While this ensures security, it also constrains scalability and innovation.

Dependence On Imports: Until domestic refining and manufacturing infrastructure matures, India's import dependence—particularly for high-value magnets—will remain significant.

Strategic International Engagement

India is supplementing domestic reforms with robust international partnerships:

Bilateral Collaborations: Strategic agreements with nations such as Argentina (lithium), Namibia (cobalt and rare earths), Ghana, Zambia, and the Democratic Republic of Congo are securing mineral access. Australia and the US have emerged as major technological and commercial partners.

Multilateral Platforms: India has aligned itself with the G7 Critical Minerals Action Plan, is a founding member of the US-led Minerals Security Partnership (MSP), and plays leadership roles in the Quad and BRICS+ frameworks to diversify and strengthen global supply chains.

BRICS+ Presidency: India is positioned to foster a Critical Minerals Cooperation Initiative connecting African reserves, Brazilian geology, Gulf investments, and Indian manufacturing capabilities.

Industrial Ecosystem And Demand

India’s vision for renewable energy and electrification is tightly linked to critical minerals:

Renewable Energy: With 220 GW of installed renewable capacity and a target of 500 GW by 2030, rare earths are central to wind and solar expansion.

Electric Mobility: Plans for 30% EV penetration by 2030 are set to dramatically increase demand for lithium, cobalt, nickel, and REEs.

Emerging Technologies: R&D and pilot projects are pushing sodium-ion and silicon carbide battery tech, with an eye on reducing reliance on traditional critical mineral supply chains.

The Road Ahead: From Resource Holder To Rule-Shaper

India's ambition is to transform from a passive resource holder to an active rule-shaper in the new mineral order. This requires:

Strengthening midstream and downstream infrastructure—especially refining, alloy, and magnet production facilities.

Coordinated policy across environmental, commercial, and regulatory agencies, potentially through a unified critical minerals authority.

Strategic diplomacy to secure overseas assets and technological partnerships.

Promoting private sector involvement in upstream and downstream segments by reforming legacy restrictions.

If executed effectively, India’s rare earth revolution can underpin the Viksit Bharat (developed India) vision, strengthen sovereignty, and situate the country as a linchpin of the global green and digital economies for decades to come.

Agencies