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Introduction: The Hidden Foundation of Modern Technology
In the gleaming showrooms where electric vehicles promise a cleaner future, in the precision-guided missiles defending our borders, and in the smartphones connecting billions globally, lies a hidden dependency that could determine the technological fate of nations. These are Rare Earth Elements (REEs), a group of 17 metallic elements that, despite their name, are relatively abundant in Earth's crust but concentrated in just a few countries. Today, one nation controls this critical supply chain with an iron fist: China.
For India, a country aspiring to become a $5 trillion economy and a global manufacturing hub, this dependency represents both a strategic vulnerability and an unprecedented opportunity. With China restricting exports of critical rare earth elements in 2025, affecting everything from India's electric vehicle production to defense capabilities, the time has come for India to make its own course toward rare earth independence.
Understanding the Rare Earth Challenge
What Makes Rare Earth Elements So Critical?
Rare earth elements are a group of 17 metals (the lanthanide series plus yttrium and scandium) that exhibit special magnetic and optical properties. These materials make modern life possible, powering smartphones, wind-turbine magnets, electric vehicle (EV) motors, solar panels and advanced defense systems. Although REEs are not truly rare in the Earth's crust, economically recoverable deposits are concentrated in very few countries.
The global rare earth market, valued at approximately $9.6 billion in 2025, is projected to reach $18.5 billion by 2030, driven primarily by the clean energy transition and defense modernization. Every electric vehicle requires 1-3 kilograms of rare earth magnets, while a single wind turbine can contain up to 600 kilograms of these critical materials.
China's Strategic Stranglehold
China possesses the world's largest reserves (44 million tonnes) and controlled around two-thirds of global REE production in 2023. More importantly, it processes around 90% of rare-earth magnets, giving it immense leverage over downstream industries. This near-monopoly gives Beijing enormous leverage over global supply chains.
In 2025, China imposed export restrictions on critical rare earth elements, requiring special licenses and end-use declarations. The impact was immediate: Indian automotive companies reported significant delays in procurement processes, with multiple import requests from Indian companies awaiting Chinese approval.
India's Rare Earth Potential
Abundant Reserves, Untapped Potential
India holds 6.9 million tonnes of reserves, the fifth largest globally according to the US Geological Survey. Much of this REE resource occurs in monazite-rich beach sands; an estimated 13.07 million tonnes of monazite contain 55–60% rare earth oxides. Deposits are scattered across coastal states such as Kerala, Tamil Nadu, Odisha and Andhra Pradesh, and inland in Jharkhand and West Bengal.
Despite this wealth, India currently extracts only minimal quantities of neodymium and praseodymium (0.0011–0.012% concentrations in beach sand minerals), highlighting the enormous untapped potential.
IREL: Indian Rare Earths Limited
Indian Rare Earths Limited (IREL), operating under the Department of Atomic Energy since 1950, currently holds a monopoly on India's rare earth mining and processing. The company achieved record mineral production of 531,000 tonnes in FY2024, with its Rare Earth Extraction Plant in Odisha recording a 9.8% increase in chemical production.
IREL has commissioned a pilot Rare Earth Permanent Magnet (REPM) plant in Visakhapatnam, Andhra Pradesh, capable of producing 3 tonnes of samarium–cobalt magnets per year using indigenous technology. Though small, this facility demonstrates local expertise and could lead to larger plants for neodymium–iron–boron magnets.
Barriers to Harnessing REEs
Processing Bottlenecks
India has limited facilities to process mined concentrate into separated oxides. State-owned IREL dominates mining and extraction, but lacks intermediate processing capabilities, because of this, the country remains stuck at the lower end of the value chain. Separation and refining plants are scarce, and there is no domestic magnet manufacturing industry.
State Monopoly and Investment Gaps
IREL's effective monopoly has discouraged private investment and technology transfer. Advanced REE extraction and separation require significant capital and technical expertise; heavy-rare-earth separation, in particular, is complex and generates radioactive by-products.
Environmental and Regulatory Challenges
Coastal Regulation Zone (CRZ) norms limit access to REE-rich beach sands, while the Atomic Energy Act restricts private sector participation in monazite mining. Environmental clearances and the presence of radioactive elements require stringent safety measures and specialized handling facilities.
The National Critical Mineral Mission
A Comprehensive Strategy for Self-Reliance
In January 2025, the Union Cabinet approved the National Critical Mineral Mission (NCMM) with a total outlay of Rs 34,300 crore ($4.1 billion) over seven years. The mission covers the entire value chain, from exploration and mining to processing, recycling, and recovery from end-of-life products.
Under the NCMM, the Geological Survey of India will conduct 1,200 exploration projects from 2024-25 to 2030-31, while over 100 critical mineral blocks will be auctioned.
Key Funding Components:
- Domestic Exploration: Rs 7,000 crore for GSI exploration activities
- Foreign Sourcing: Rs 5,600 crore for overseas acquisition and risk coverage
- Recycling Infrastructure: Rs 1,600 crore for mineral recovery and recycling schemes
- Value Chain Development: Rs 1,600 crore for R&D, processing parks, and stockpiling
- Human Resources: Rs 600 crore for skill development and international collaboration
The Ministry of Mines is designing a Production-Linked Incentive scheme for recycling critical minerals. Recycling magnets from end-of-life electronics and EV motors can lower raw material demand, though it is energy and water intensive.
Breaking China's Hold: India's Multi-Level Strategy
International Partnerships and Technology Transfer
IREL is actively pursuing international partnerships to secure supply chains and technology. The company is exploring collaborations with Oman, Vietnam, Sri Lanka, and Bangladesh for rare earth exploration and development. Additionally, through KABIL (Khanij Bidesh India Limited), India has acquired exploration rights over 15,703 hectares in Argentina's lithium-rich Catamarca province.
Technology partnerships with Japanese and South Korean companies for magnet production technology are being pursued to bridge the critical technology gap.
Recycling and Circular Economy
India currently recovers less than 1% of rare earth elements through recycling, compared to almost 100% recovery rates in China. The NCMM includes provisions for developing recycling infrastructure and recovering critical minerals from alternative sources such as tailings, fly ash, and red mud.
Urban mining from electronic waste represents a significant opportunity, with millions of smartphones and electronic devices reaching end-of-life annually.
Private Sector Participation
Recent amendments to the Mines and Minerals Act in 2023 have begun addressing regulatory bottlenecks, opening the sector to private companies after decades of public sector monopoly.
Economic Impact and Strategic Implications
Market Opportunities
India's rare earth magnet demand is estimated at 4,000 tonnes annually, with potential to double by 2030. The electric vehicle sector alone is expected to drive significant demand growth, with India targeting substantial growth in electric passenger vehicles.
Key sectors driving demand include:
- Electric Vehicles: Requiring 1-3 kg of rare earth magnets per vehicle
- Renewable Energy: Wind turbines needing up to 600 kg of rare earth materials
- Defense Systems: Precision-guided missiles and advanced radar systems
- Electronics: Smartphones, computers, and consumer electronics
Technological Sovereignty
Rare earth independence is fundamental to India's technological sovereignty aspirations. Control over these critical materials would enable India to pursue its technological ambitions without external constraints, supporting initiatives like the India Semiconductor Mission with its Rs 76,000 crore outlay.
Geopolitical Positioning
By developing alternative supply chains, India can reduce global dependence on China while positioning itself as a reliable supplier for democratic allies. This aligns with initiatives like the Mineral Security Partnership (MSP), where India collaborates with like-minded nations to secure critical mineral supplies.
What India Must Do Next: Strategic Action Points
Short-term Priorities (2025-2027)
- Accelerate REPM Production: Scale up from the pilot 3-tonne facility to commercial production
- Technology Acquisition: Finalize partnerships with Japan and South Korea for advanced processing technology
- Infrastructure Development: Establish dedicated mineral processing parks with modern infrastructure
- Regulatory Streamlining: Fast-track environmental clearances and land acquisition processes
Medium-term Goals (2027-2030)
- Domestic Processing Capabilities: Develop complete separation and refining infrastructure
- Magnet Manufacturing: Establish large-scale neodymium-iron-boron magnet production facilities
- Recycling Infrastructure: Build comprehensive urban mining and recycling capabilities
- Skills Development: Create specialized training centers for rare earth technologies
Long-term Vision (Beyond 2030)
- Technology Leadership: Develop next-generation processing technologies and alternative materials
- Export Potential: Emerge as alternative supplier for global markets
- Regional Hub: Serve as rare earth processing center for South Asia
- Complete Self-Reliance: Achieve independence from external supply dependencies
Challenges and Risk Mitigation
Technical Hurdles
- Processing Technology Gaps: Limited capabilities in converting oxides to high-value magnets
- Capital Intensity: High upfront investments required for processing facilities
- Skilled Workforce: Shortage of technical expertise in rare earth processing
Environmental Considerations
- Radioactive By-products: Safe handling and disposal of thorium-containing materials
- Water and Energy Intensity: Sustainable processing methods and resource management
- Coastal Sensitivity: Balancing mining activities with environmental protection
Market Dynamics
- Global Competition: Intense competition from other countries seeking Chinese alternatives
- Price Volatility: Managing cost fluctuations in global rare earth markets
- Technology Access: Securing favorable terms for critical processing technologies
Conclusion
Rare earth elements underpin the modern technologies that power clean energy, defense systems and consumer electronics. India's substantial REE reserves give it a unique opportunity to build a resilient, home-grown supply chain and become a global technology powerhouse.
Yet converting potential into reality demands long-term commitment: unlocking the resource base, investing in processing and magnet manufacturing, cultivating foreign partnerships, promoting recycling and balancing environmental considerations. The measures announced under the National Critical Mineral Mission, export curbs, production-linked incentives and the Visakhapatnam REPM plant are encouraging steps.
With China's export restrictions creating market disruption, the timing is particularly advantageous for India to emerge as a reliable alternative supplier. Success in rare earth independence will not only secure India's technological future but also position the country as a critical player in the global clean energy transition and advanced technology ecosystems.
Sustained execution, innovation and collaboration can propel India from being a raw-material supplier to a key node in the world's high-tech economy. The next five years will determine whether India can transform from a rare earth import-dependent nation to a self-reliant technological powerhouse. The stakes are enormous, and the clock is ticking.
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Very nice article
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