Amid rising global trade tensions and China’s tightening grip on rare earth exports, India is strategically positioning itself as a major player in the critical minerals sector.
China Tightens Control on Rare Earths
China, which dominates roughly 70% of global rare earth mining and nearly all magnet production and processing, has recently imposed stricter export regulations. These controls, citing national security, now require foreign entities to secure government approval for exporting rare earth materials and technologies, especially those used in defense and semiconductors.
India’s Strategic Moves
To strengthen its rare earth capabilities, India has rolled out multiple initiatives:
- National Critical Mineral Reserve: A two-month stockpile of rare earth elements is being established to protect domestic industries against global supply shocks.
- Magnet Production Incentives: The government has launched a ₹7,300 crore incentive scheme to boost domestic rare earth magnet manufacturing, reducing reliance on imports and strengthening local production.
- Prioritizing Domestic Supply: India has directed its state-run miner IREL to halt exports of key rare earth materials like neodymium to Japan, ensuring critical resources remain available for domestic industries, including electric vehicle manufacturing.
India’s Rare Earth Potential
India holds around 6.9 million metric tonnes of rare earth reserves, ranking third globally. Significant deposits exist in coastal sands across Andhra Pradesh, Odisha, Tamil Nadu, and Kerala. Despite this abundance, domestic production has lagged, with the country still reliant on imports for high-value rare earth magnets.
Growth Prospects
Several factors highlight India’s growing role in the sector:
- Public Sector Leadership: IREL (India) Limited continues to lead extraction and processing efforts.
- Private Sector Engagement: Companies like Hindustan Copper, MOIL, and GMDC are exploring opportunities in rare earth production, potentially scaling domestic output.
- International Collaboration: Research partnerships with the United States aim to combine technological expertise and develop advanced rare earth applications.
Conclusion
By proactively securing its rare earth supply chains, India is reducing dependency on external sources and positioning itself as a strong contender in the global critical minerals market. With rising global demand for rare earths, India’s strategic initiatives could turn the country into a key hub for these essential materials.
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