Can India Rival China in Rare Earths? A Strategic Opportunity Explained

Rare earths might sound exotic, but they are anything but rare in their importance. From electric vehicles (EVs) to fighter jets, they’re a critical component of modern tech and defense infrastructure. China dominates this space but with Beijing now curbing global supply, can India rise to the occasion?

The Global Rare Earths Landscape

Currently, China produces around 2,70,000 metric tonnes of rare earths annually. In contrast, India’s output stands at just 2,900 metric tonnes - barely 1% of China’s volume. China not only controls over 70% of global production, but also commands nearly 90% of processing capacity, especially in rare earth magnets that power EV motors and precision defense tools.

Over the past decade, China has systematically secured mining rights across Asia, Africa, and Latin America. It now sits at the epicenter of a supply chain the world depends on.

Why China Holds the Cards

Beijing’s recent decision to limit exports is officially aimed at curbing illegal mining. But the strategic intent seems clear: maintain leverage over global supply and delay other nations from building alternate sources. It's a reminder of China’s playbook during the COVID-19 pandemic when supply chain constraints led to global inflation surges.

With this move, the global auto and defense sectors - already under cost pressure - face another challenge: sourcing critical inputs elsewhere in a short time.

India’s Untapped Opportunity

So, where does India stand? On paper, India's output is minuscule. But the true potential lies beneath its coasts. India holds around 35% of global beach sand mineral reserves, a key source of rare earths. Until now, there was little incentive to scale up domestic production due to China's dominance.

Now, the game is changing. India has recognized this moment as an opportunity - not just for self-sufficiency, but also to become a credible alternative in the global supply chain. The government is offering new incentives and encouraging private sector participation in both mining and processing.

Policy Push: From Monopoly to Market

Historically, rare earth mining in India has been under Indian Rare Earths Ltd, a government entity formed in 1950. But output remained modest, and R&D investment was limited. That’s starting to shift. Recent policy changes aim to:

• Encourage private sector participation in exploration and extraction
• Ease environmental clearances for mining activity
• Fund R&D to improve processing technologies
• Develop domestic demand via the EV and defense ecosystem

With a stronger infrastructure push and clearer pricing mechanisms, India could finally unlock value from its vast reserves.

What’s the Road Ahead?

India still has a long road to travel. The gap in scale, technology, and processing capacity is huge. But the seeds have been planted.

If executed well, India’s rare earth push can:

• Reduce import dependency in key sectors like EV and defense
• Create a high-value export pipeline to global manufacturers
• Strengthen its geopolitical leverage in global trade

The rare earth story is no longer just about geology - it’s about strategy, execution, and global positioning. For India, it’s a test of readiness to step up when the world needs alternatives.

Disclaimer: This article is intended for informational purposes only. It does not constitute investment, policy, or strategic advice. Readers should conduct their own research or consult qualified professionals before acting on the information presented.