India holds the world’s third-largest reserves of rare earth elements (REEs) — an estimated 6.9 million tons, according to the US Geological Survey — trailing only China and Brazil. Yet, despite its mineral wealth, India extracted just 2,900 tons of rare earths in both 2023 and 2024, highlighting the vast gap between potential and performance.
Untapped monazite-rich sands in Odisha, Tamil Nadu, and Kerala, along with expected deposits in Rajasthan, Uttar Pradesh, and Karnataka, offer immense strategic value. However, India’s mining ambitions remain hobbled by the absence of commercial-scale REE processing technologies.
India Imports What It Could Produce
With no advanced domestic infrastructure to refine rare earth oxides, India ironically imports the very materials it already possesses. This results in an import bill of over ₹300 crore, particularly for the auto and electric mobility sectors. Meanwhile, global demand for EV magnets and high-tech components continues to soar, and India lags behind.
China’s Export Curbs Tighten Global Supply
China, which controls over 70% of global REE supply, recently imposed an export ban (effective April) on seven critical minerals, including dysprosium, gadolinium, lutetium, samarium, scandium, terbium, and yttrium. These elements are essential for high-tech, defence, and EV industries.
Although neodymium and praseodymium shipments remain unaffected, the ban underscores China’s strategic grip on the supply chain — and raises alarms among global manufacturers.
Policy Push, But Progress Feels Sluggish
India has taken incremental policy steps, including mineral block auctions, relaxed FDI norms, and ongoing efforts to secure technology tie-ups. Public sector enterprise IREL (India Rare Earths Ltd) has initiated dialogues with Vietnam, Oman, and Sri Lanka to explore partnerships in REE development.
An action plan with Oman is already in motion, and an MoU with Vietnam is under consideration. However, experts argue that these steps fall short of matching the urgency demanded by a market expected to hit $9.6 billion by 2027.
Processing Bottlenecks Remain a Major Roadblock
While India permits free-market participation in the downstream REE sector, the lack of intermediate processing capabilities continues to be a major barrier. This technological gap leaves India stuck at the lower end of the REE value chain — mining low-grade ores but lacking the capacity to convert them into high-value products like permanent magnets.
What’s in the Ground — and What’s Missing
India’s in-situ monazite reserves stand at 13.07 million tons, with 55–60% rare earth oxides. These are found in coastal placer sands across Kerala, Tamil Nadu, Odisha, Andhra Pradesh, Maharashtra, and Gujarat, and in inland deposits in Jharkhand and West Bengal.
India currently extracts only neodymium and praseodymium at up to 99.9% purity. These elements occur in trace quantities — between 0.0011% and 0.012% — in beach sand minerals.
However, high-value REEs like dysprosium and terbium — critical for energy transition technologies — are not available in extractable quantities in Indian reserves. Exploration is ongoing, but these gaps limit India’s ability to serve demand for REE permanent magnets, which account for over 80% of rare earth usage by value.
Coastal Regulations Add to Constraints
Adding to the complexity, mining is further restricted by Coastal Regulation Zone (CRZ) norms, which limit access to REE-rich beach sands. As reported by thehindubusinessline.com, these environmental constraints must be navigated carefully if India hopes to scale up its rare earth extraction without ecological backlash.
