India’s Rare Earth Strategy: Building a Credible Alternative to China

Often called the “new oil” of the 21st century, rare earths have become essential to the clean energy transition. A report by Kotak Mutual Fund notes that these metals, though largely unseen, are “quietly powering a cleaner, smarter, and more resilient world.”

India holds about 6% of the world’s rare earth reserves but currently contributes less than 1% to global output. States such as Kerala, Tamil Nadu, Odisha, Andhra Pradesh, and Gujarat are considered major sources for expansion. The government’s reforms under the Mines and Minerals (Development and Regulation) Act and production-linked incentive schemes aim to attract private investment, boost research, and promote sustainable extraction practices.

A major breakthrough came when IREL (India) Limited was removed from the US export control list, paving the way for wider international collaboration. Its upcoming facility in Visakhapatnam will manufacture samarium–cobalt magnets domestically — a strategic step toward technological self-reliance. Alongside initiatives like KABIL and participation in the Mineral Security Partnership led by the US, India is solidifying its role in the global critical mineral ecosystem.

While China still dominates, accounting for roughly 70% of global production and 90% of refining, forecasts suggest its share could fall to 51% and 76% respectively by 2030, as nations work to diversify supply chains. With demand for rare earths expected to surge by 300–700% by 2040, India’s growing capabilities could not only secure domestic supply but also position the country as a key player in the global clean technology market under the “Make in India” banner.

India’s advance into the rare earth sector represents more than industrial opportunity — it marks a path toward greater resilience, technological advancement, and strategic independence.