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Secure and sustainable supply chain for rare earth elements (REEs) is critical for India’s future growth.
In brief
- Modern technological innovations including AI, GenAI, defense and clean energy extensively utilize rare earth elements (REEs).
- Although China had an early start in rare earth mining, processing and marketing, other countries and regions such as the US, the EU and India are catching up.
- India’s National Critical Mineral Mission 2025 aims to develop an effective framework for self-reliance in the sector.
What is the importance of rare earths in modern technology?
REEs are vital components in a wide array of modern technologies. Key applications of light and heavy REEs are summarized in Table 1.
The economic importance of REEs lies not just in their value as raw materials but in their crucial role in numerous downstream industries such as electronics, defense technologies, electric vehicles, clean energy etc., which contribute significantly to global GDP and technological advancement. Ensuring a secure and sustainable supply chain for these critical materials is a major economic and strategic imperative for nations worldwide.
Who owns or supplies rare earths/rare earth products?
China has a share of 68.6% in mining of REEs, followed by the US at 12.3% (Table 2). These percentages are much higher than their corresponding shares in reserves (40% and 1.64%, respectively). This is indicative that exploitation of rare earths through mining is much more in these two countries than their reserves warrant. Both US and China are, therefore, looking to expand their ownership of rare earth rich additional lands.
The scope for further rare earth mining is much more in Brazil, which has 19% share in reserves but only 0.02% in mining. Similarly, India’s share in global reserves is at 6.27% but its share in mining is limited to 0.83%.
Table 2: Worldwide rare earth reserves and mining
Source (Basic data): https://pubs.usgs.gov/periodicals/mcs2024/mcs2024-rare-earths.pdf
China is also a dominant player in the processing of the REEs. Any country which needs to secure its supplies of REEs needs to put in place both raw material supply (through mining domestically or through controlling mines abroad) and processing capacity and technology for refining for final use.
Rare earths and India’s Viksit Bharat aspiration
REEs are critical for modern technologies based on semiconductors. These serve as critical inputs at different stages of production. REEs are, therefore, vital for India’s future growth. Any shortage will serve as a substantive bottleneck in growth and employment. To realize India’s Viksit Bharat aspiration, Aatmanirbhar strategy requires that India develop and control REE extraction and processing. Since REEs serve as a critical input throughout the modern production chains, they will have a substantial role linked to forward linkages in output generation and employment, which will be essential for optimizing opportunities generated by India’s demographic dividend.
India possesses a significant quantity of REEs. What is now needed is accelerating the extraction of REEs and developing REE processing techniques within the country. India has launched National Critical Mineral Mission (NCMM) in 2025 for this purpose. Under the NCMM, Geological Survey of India (GSI) has been assigned to carry out 1,200 exploration projects from FY25 to FY31. To reduce India’s import dependency in REEs, the Atomic Minerals Directorate for Exploration and Research (AMD) is carrying out exploration to augment resources along the coastal, inland and riverine placer sands of the country. IREL Limited, a public sector undertaking under Department of Atomic Energy (DAE), has been mandated to produce REEs in the form of high pure rare earth oxides from rare earths bearing mineral Monazite in India.
Going forward, substantial additional resources need to be allocated by central and state governments as well as the private sector for research and development in the field of rare earths. Strategic partnerships for REEs are also needed with countries that are known to have large REE reserves, such as Myanmar, Vietnam, Brazil, South Africa and Tanzania.
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Summary
India needs to accelerate the extraction and processing of rare earth elements domestically so that some of the lead that China has taken in this space can be neutralized. India may also explore strategic partnerships for REEs with countries possessing large reserves of these elements.
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