India stands at a critical juncture in its pursuit of rare earth element (REE) self-reliance, possessing the world’s third-largest reserves yet contributing less than 1% to global production. With China’s tightening export controls disrupting global supply chains in 2025, India has launched an ambitious National Critical Mineral Mission (NCMM) with a financial commitment of ₹34,300 crores over seven years to transform from a passive importer to an active player in the global critical minerals landscape.
| Metric | Value | Details |
|---|---|---|
| Global REE reserves rank | 3rd | Behind China (44 MT) and Brazil (21 MT) |
| India REE reserves (million tonnes) | 6.9-8.52 | Primarily in monazite sands |
| Global production share (%) | <1% | Despite having 6-8% of global reserves |
| Total identified REE reserves | 8.52 MT | Spread across 8 states |
| Lithium reserves in J&K (million tonnes) | 5.9 | Salal-Haimana block, Reasi district |
| NCMM financial commitment (crores) | 34,300 | Over 7 years (2025-2031) |
| Number of identified critical minerals | 30 | Identified by Ministry of Mines |
| Processing capacity (tonnes) | 11,200 | Rare earth concentrate capacity |
| Refining capacity – TREO (tonnes) | 5,000 | Total Rare Earth Oxide capacity |
The Strategic Imperative
China’s Market Dominance and Export Controls
China’s quasi-monopoly over rare earth elements has become a geopolitical weapon, with the country controlling 69% of global REE production and over 90% of processing capacity. In April 2025, China imposed strict export restrictions on 17 rare earth elements, requiring additional licenses and effectively suspending exports to multiple countries. This move has severely impacted India’s industrial sectors, with transport equipment, basic metals, machinery, construction, and electrical & electronics facing significant production and export disruptions.
The impact on India has been immediate and severe. In fiscal year 2025, India imported 53,748 metric tons of rare earth magnets from China, critical for manufacturing automobiles, wind turbines, medical equipment, and advanced technological products. Over 35 Indian importers have not received shipments, with many considering invoking “force majeure” clauses in their supply contracts.
India’s Paradoxical Position
Despite holding 8.52 million tonnes of rare earth reserves spread across eight states, India’s domestic production remains nascent. The country possesses approximately 7.23 million tonnes of REE oxide contained in monazite deposits along coastal states, plus an additional 1.29 million tonnes in hard rock formations. This positions India as having 6-8% of global reserves while producing less than 1% of global output.
| State | Deposits | Resources (MT) | Type |
|---|---|---|---|
| Andhra Pradesh | 24 | 3.78 | Carbonatites, beach sand placer |
| Tamil Nadu | 50 | 2.47 | Carbonatites, beach sand, alkaline rocks |
| Odisha | 12 | 3.16 | Beach sand placer deposits |
| Kerala | 35 | 1.84 | Beach sand placer deposits |
| West Bengal | 1 | 1.2 | Carbonatites |
| Gujarat | 2 | 0.07 | Carbonatites |
| Jharkhand | 1 | 0.21 | Yttrium-rich xenotime placers |
| Maharashtra | 5 | 0.004 | Carbonatites |
The National Critical Mineral Mission
India’s comprehensive strategy encompasses the entire value chain from exploration to end-of-life product recovery. The mission targets:
- 1,200 exploration projects by 2030-31
- 100+ critical mineral blocks for auction by 2031
- Fast-track approvals for mining projects
- ₹16,300 crores government expenditure plus ₹18,000 crores PSU investments
Domestic Capabilities and Limitations
Indian Rare Earths Limited (IREL) leads domestic processing with:
- 10,000 MT annual processing capacity for rare earth bearing minerals
- 5,000 tonnes TREO refining capacity
- Focus limited to light rare earth elements (lanthanum, cerium, neodymium)
- Heavy rare earth gap: Critical elements like dysprosium and terbium remain import-dependent
The Lithium Setback
India’s 5.9 million tonne lithium deposit in Jammu & Kashmir has faced two failed auctions due to insufficient exploration and security concerns. The Ministry of Mines has ordered re-exploration to achieve detailed geological assessment before renewed attempts.
International Strategy: Diversification Through Partnerships
Khanij Bidesh India Limited (KABIL) spearheads overseas acquisitions:
- Argentina: $24 million lithium exploration agreement covering 15,703 hectares
- Australia: MoU for lithium and cobalt asset investments
- Chile: Brine-type lithium exploration partnerships
Multilateral Alliances:
- Minerals Security Partnership: 14-country initiative reducing China dependence
- Quad Critical Minerals Initiative: Cooperation with Australia, Japan, and USA
Critical Challenges
Technology Gaps
- Limited separation capabilities for individual rare earth elements
- Minimal value-addition in magnets and high-end products
- Heavy reliance on foreign technology and expertise
Economic Impact
Chinese export restrictions have created cascading industrial effects:
- Automotive delays affecting EV manufacturing
- Electronics disruption impacting smartphone production
- Renewable energy constraints threatening clean energy transition
- Defense vulnerabilities in advanced military systems
India’s critical mineral imports average $33 million annually for rare earths and $249 million for magnets, contributing to a $100 billion trade deficit with China.
The Road Ahead
Strategic Implications
India’s rare earth self-reliance journey represents more than economic policy—it’s a fundamental shift toward strategic autonomy. With substantial reserves providing the foundation and the NCMM offering comprehensive institutional support, success depends on executing complex technological upgrades while maintaining global competitiveness.
China’s export restrictions have created both crisis and opportunity. While immediate disruptions threaten industrial growth, they provide compelling justification for accelerated domestic development and strategic partnerships with democratic allies.
The timeline for meaningful self-reliance extends beyond 2030, requiring sustained political commitment and substantial private investment. India’s dual approach of domestic development combined with international partnerships offers the most pragmatic path forward, reducing immediate vulnerabilities while building long-term capabilities.
Success in critical minerals could catalyze broader industrial transformation, positioning India as a major player in clean energy transition and advanced manufacturing—essential foundations for 21st-century economic competitiveness and strategic autonomy.
