India’s Strategic Pivot: Securing the Rare Earth Supply Chain
India’s Prime Minister Narendra Modi and his Canada counterpart Mark Carney inked a critical mineral and Uranium deal, as India and Canada prepared to soon finalise the Comprehensive Economic Partnership Agreement, a free trade pact, and targeted $50bn trade by 2030. The two countries sought to move past years of diplomatic friction to get economic ties back on track. The $2.6 billion Uranium deal included plans to work on building Small Modular Nuclear Reactors and advanced reactors. Canada held some of the largest known resources of Rare Earth Elements (REEs) globally, estimated at over 15.2 million tonnes. The manufacturing of Permanent Magnets was the largest global use for REEs, accounting for 48% of total demand. Although many countries, including Canada, had REE reserves and resources, producing these metals involved complex separation and refining processes.
Earlier, Brazil President Luiz Inácio Lula da Silva visited India 18–22 February. The two nations signed a critical minerals deal ostensibly to curb dependence on China. Narendra Modi hailed the agreement on critical minerals and rare earths as a “major step towards building resilient supply chains”. China dominated the mining and processing of the world’s rare-earth and critical minerals and had increased its grip on exports in recent months as the United States attempted to break its hold on the growing industry.
After China, Brazil was the world’s second-largest holder of critical minerals, which were used across a range of fields, including Electric Vehicles, Solar Panels, smartphones, Jet Engines, and Guided Missiles. Brazil was India’s largest trading partner in Latin America, and its growing cooperation with Brazil on critical minerals followed recent supply chain engagements with the United States, France, and the European Union.
India and the United States had been pushing cooperation on critical minerals, essential materials like Lithium, Cobalt, and rare earths used in Electric Vehicles, Semiconductors, and clean energy technologies, announced External Affairs Minister S. Jaishankar as he expressed support for the critical minerals partnership framework.
Rare Earths and Their Applications
Rare Earth Elements were a group of 17 metallic elements, Scandium, Yttrium, and the 15 Lanthanides, that were crucial for many modern technologies, including electronics, clean energy, and defence, and underpinned over 200 advanced applications. Rare Earth Elements were the “vitamins” of modern industry. Although their name suggested rarity, they were not scarce in the Earth’s crust, but rather, they were difficult to mine because they were dispersed and not found in high concentrations in economically viable deposits. They were lustrous, silvery-white, soft, and somewhat reactive metals. Their unique chemical, magnetic, and optical properties made them vital for applications like strong Permanent Magnets for electric motors, wind turbines, and consumer electronics; components in smartphones, laptops, and televisions; key in rechargeable batteries, Electric Vehicles, and other clean energy technologies; lasers, glass polishing, catalytic converters, and medical imaging (MRI).
Neodymium enabled powerful magnets in electric motors, and Europium was essential for the vibrant colours of screens. These properties could not be easily substituted, making REEs critical even in minute quantities. They appeared in everything from smartphones and laptops to wind turbines, LED lighting, Electric Vehicles, Drones, and precision defence systems. Without REEs, the productions of many high-tech, green, and even medical innovations were severely constrained.
REEs were critical for national security and military applications, such as guidance systems, radar, and stealth technology. Every Lockheed Martin F-35 fighter jet, for example, was engineered with more than 420 Kg of rare earths. More than 2,500 Kg of rare earths supported each Arleigh Burke-class guided missile destroyer, and each Virginia-class submarine required more than 4,500 Kg of the sought-after metals. The push for renewable energy, such as wind turbines and Solar Panels, was a major driver of demand. REE were also used in products like catalysts for petroleum refining, glass, and alloys.
Rare Earths and Unfolding Geopolitics
Goldman Sachs in its October 2025 report had flagged the risk of disruption in the supply of rare earths and key critical minerals. The report stated that rare earths disruption of 10 percent could cut global output by $150 billion. Light REE could be future targets for curbs as China expanded REE export controls. The mounting risks to global supply chains of rare earths and other critical minerals, with China‘s dominance in mining and refining, was of concern. China controlled 69 percent of global rare earth mining, 92 percent of refining, and 98 percent of Permanent Magnets manufacturing. China kept selectively expanding export curbs on rare earths for Semiconductor users to get better trade deals. China was leveraging its near-monopoly on REEs as a strategic weapon against the United States by implementing export restrictions and technology bans, particularly on heavy rare earths essential for defence and high-tech industries.
REEs had become a flashpoint in geopolitics, as they were critical to high-tech industries and essential in uses from batteries to computer chips, Artificial Intelligence, and defence equipment. Therefore, more nations were seeking to build independent REE and magnet supply chains. Samarium, Graphite, Lutetium, and Terbium were particularly vulnerable to export curbs. Samarium, used in heat-resistant samarium-cobalt magnets, was key for aerospace and defence. Cerium and Lanthanum were reportedly future targets for curbs. Neodymium-Praseodymium Oxide was critical for making Permanent Magnets.
Heavy rare earth elements were particularly scarce outside China and Myanmar, with most known deposits being small, lower-grade, or radioactive. Developing new mines required eight to 10 years. Refining REEs required advanced expertise and infrastructure, with builds typically taking five years. Barriers from geological scarcity to technological complexity and environmental challenges remained substantial. Western producers’ reliance on China remained significant.
Alternative Supply Sources
China’s dominance was the result of decades of state policy. While China held a near-monopoly, efforts were underway to develop new mines and processing facilities in countries like the United States, India, and Australia. Trade networks were evolving, with some Asian countries forming a more cohesive trade community that could play a greater mediating role in the China–United States trade relationship.
While REE were not geographically scarce, economically viable concentrated deposits were rare, especially for heavy rare earths. Countries with the largest reserves included China, Brazil, Canada, and India. Global production of Rare Earth Oxides had nearly tripled since 2017, with production closing toward 390,000 metric tons in 2024, driven by increasing investment in renewable energy and Electric Vehicles.
Rare Earths in India
India had the world’s fifth-largest REE reserves but produced a very small fraction. The main source was Monazite sand, primarily found along the eastern and southern coasts. Production had been slow due to factors like difficult-to-extract resources, regulatory hurdles, and a lack of downstream industrial infrastructure beyond initial extraction. To meet its goals for clean energy and strategic autonomy, India was working to overcome these challenges through government initiatives, exploring partnerships, and developing its domestic supply chain, but it remained a major importer.
Despite large reserves, India‘s production was low, at around 2,900 tonnes per year, accounting for less than 1 percent of global output. India‘s reserves had a low grade and were linked with radioactivity, making extraction long, complex, and expensive. Securing new mining permits, obtaining environmental and forestry approvals, and dealing with residential settlements had created significant operational constraints for the state-owned Indian Rare Earths Limited. While India had facilities for mining to refining into oxides, it lacked industrial-scale facilities for downstream processes like producing alloys and Permanent Magnets.
Setting up a complete rare earth supply chain required massive investment and took about a decade to get operational. Reducing dependence on China, which currently dominated the global market, was a key driver for India‘s efforts. A reliable domestic supply was crucial for India to meet its 2070 net-zero target, as Rare Earth Elements were essential for wind turbines and Electric Vehicle motors. The government was trying to incentivize private investment and develop a complete domestic supply chain. India was exploring new deposit locations and potential global partnerships to boost its capabilities.
Union Budget 2026–27 announced Dedicated Rare Earth Corridors in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu for mining, processing, research, and manufacturing of Rare Earth Permanent Magnets. A Rs 7,280 crore Rare Earth Permanent Magnets manufacturing scheme was approved in November 2025. 6,000 MTPA integrated capacity was to be created. Rs 6,450 crore sales-linked incentives were allocated over five years, with a Rs 750 crore capital subsidy for advanced facilities. The Geological Survey of India had identified 482.6 million tonnes of rare-earth ore resources.
Strategic Importance for India’s Future
REE were important enablers in four strategic areas. Rare Earth Elements were essential for renewable energy technologies, from the powerful Permanent Magnets in wind turbines to catalysts in Solar Panels and batteries in Electric Vehicles. Expanding domestic rare earth capacity supported India’s climate targets and energy security by nurturing a local clean-tech industry. As India furthered the digital economy and manufacturing of electronics (smartphones, computers, and consumer electronics), access to rare earths provided supply security. It was also the foundation for the development of electric and autonomous vehicles, Drones, and other new transportation. Defence systems like Guided Missiles, radar, lasers, and communication systems depended extensively on REE based parts. Domestic production of rare earths would enhance national security by lowering India’s geopolitical risk exposure to supply shocks. Lastly, by producing rare earths domestically, not only could India save on expensive rare-earth imports but could also create export high value materials.
Way Ahead for Expanding India’s REE Capabilities
Since April 2025, Beijing had imposed strict export controls on seven kinds of rare earth metals and related Permanent Magnets, including Samarium. China’s Ministry of Commerce stated that these materials served both civilian and defence-related purposes, and that any future exports would be subject to approval through specially issued licences. This move shook the global supply chains, particularly in defence, Electric Vehicles, and high-tech manufacturing sectors. Currently, China dominated the global production of Samarium, serving as the primary supplier worldwide. Samarium was an essential element for advanced military applications and stood out for its strategic indispensability. Beijing’s timing for controlling the supply chains for rare earths was not accidental. It came at a moment when the Western and allied military powers had strained their military resources due to the prolonged battles in Ukraine and the Gaza Strip. That put a greater onus on India to act more quickly.
India’s vision of self-reliance fuelled by pandemic-era supply disruptions placed REEs at the centre of its economic and security strategy. Rare Earth Elements were not truly scarce. Mining these elements was technically complex. Concentrated, economically viable deposits were rare, especially for heavy rare earths. For decades, China had dominated the global REE market, and even today, controlled nearly 70 percent of global output. The United States and Myanmar each accounted for around 12 and 8 percent respectively, with Australia, Thailand, Nigeria, and others sharing the remainder. India’s own output was currently a small slice, about 1.0 percent of the world’s supply.
China, Brazil, and India were reported to have the largest reserve bases, followed by Australia, Russia, Canada, Vietnam, the United States, and Greenland. Now one knew why President Trump wanted to take over Greenland. Geopolitical tensions and the clean energy transition were encouraging the diversification of supply chains from China.
India possessed an estimated 35 percent of the world’s beach sand mineral deposits (a rich source of rare earths). Despite this potential, India’s actual production had remained modest. Realising this potential required bridging the gap between reserves and production. This vast resource, if fully tapped, could position India as a key long-term supplier. Mine production of rare earths in India had to go up significantly and quickly.
Setting up a Rare Earth Theme Park Initiative would support establishing pilot plants and demonstration facilities across the value chain, fostering entrepreneurship and skills development. The Odisha Sands Complex (OSCOM), a flagship unit of Indian Rare Earths Limited, was expanding its processing capacity, notably for mixed rare earth chlorides, and upgrading its mineral handling infrastructure, including a private freight terminal and a new de-salination plant. A planned Rare Earth Permanent Magnets plant would produce 3,000 kilograms of magnets for defence and clean energy applications. Joint ventures, such as IREL-IDCOL, were building new mining and separation plants to mine coastal sand deposits in Odisha. In Bhopal, a proposed Rare Earth and Titanium Theme Park aimed to commercialise laboratory-scale technologies for extraction and processing, creating an innovation hub for the sector.
The government aimed to triple the country’s Rare Earth Oxides production capacity by 2032 to meet growing industrial and export demand. Private industry was also stepping up. In late 2024, Trafalgar Engineering announced plans for India’s first integrated plant to produce rare earth metals, alloys, and magnets. Such facilities would fill a critical gap in the value chain, allowing India to go beyond the mining of raw materials and proceed up the value chain toward the production of finished, high-technology goods. All these fed into a combined effort to form a 100 percent domestic supply chain, from exploration and mining to processing and the end-use manufacturing process.
Some major private firms in India involved in rare earths included the Vedanta Group, Hindustan Zinc Limited, Hindustan Copper, Mahindra, Uno Minda, and JSW Group, which were either already in the sector or had shown interest in developing a rare earth magnet ecosystem. India was also advancing QUAD based mineral cooperation and Production-Linked Incentive incentives to reduce rare earth dependency.
The European Union was making a significant shift in its approach to resource security, preparing to launch a strategic stockpiling program for critical minerals. Japan, South Korea, and the United States had long maintained national stockpiles; this move underscored a broader securitization of critical mineral supply chains. But while stockpiling might offer short-term resilience, it reflected a largely unilateral response to a broader global challenge. India might also have to do the same like strategic crude reserves. India–European Union strategic partnership encouraged technology transfer and cooperation on critical minerals to secure supply chains, as highlighted by experts.
India’s rare earths plans were at an inflection point. With Khanij Bidesh India Ltd, and mining reforms, India was securing overseas assets and opening its rare earth sector to private players. With ample reserves, a growing global demand, and strong policy support, India had what it took to become a strong player in the world regarding rare earth elements. The government’s sweeping reforms and incentives were a sign of its determination to turn mineral wealth into national power. The challenges in technology and regulation would be demanding, but India’s long-term perspective was clear: to translate its rare earth possibilities into economic growth, technological leadership, and strategic security. In an era where power projection extended beyond borders into supply chains and resource dependencies, India had to rethink its national security architecture.
Recognising rare earths as strategic assets, the Indian government launched initiatives to develop the sector. These efforts blended policy reform, funding incentives, and infrastructure projects to create a robust domestic rare earth ecosystem. Union Budget 2026–27 had greatly incentivised the critical minerals and REE sector. India aimed to reduce its 80-90 percent import dependence on China for Rare Earth Permanent Magnets by establishing 6,000 MTPA manufacturing capacity, supported by a Rs 7,280 crore scheme. The new corridors would connect mining, processing, and manufacturing, specifically targeting coastal areas rich in Monazite deposits. The initiative was part of the National Critical Mineral Mission to secure long-term supplies for high-tech sectors like Electric Vehicles and wind turbines. Rare earth resilience was no longer merely an industrial challenge but a geopolitical imperative.
Note: The article was originally written by the Author for The First Post on 31st March 2026; it has since been updated.
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