Abstract: India is standing at a pivotal moment to unlock its vast Rare Earth Element (REE) reserves and challenge the People’s Republic of China’s (PRC) long-standing monopoly in this critical sector. Despite holding 5.3% of global REE reserves, India contributes only a fraction of global output due to regulatory bottlenecks, a lack of refining infrastructure, and limited private-sector participation. With the PRC weaponising trade through export restrictions and end-user licensing requirements, India’s automobile and electronics industries face supply shocks. However, policy reforms, including the ₹5000 crore mining scheme and amendments to the MMDR Act, have opened avenues for private exploration. Rajasthan, Odisha, and Tamil Nadu emerge as potential REE zones, while advanced technologies like solvent extraction and plasma separation offer processing alternatives.
Problem statement: How can India translate its substantial rare-earth reserves into strategic and industrial advantage while reducing its structural dependence on the PRC-dominated global supply chain?
So what?: The Government of India must accelerate regulatory reform, incentivise domestic processing capacity, and strategically coordinate public–private investment in critical minerals. Industry stakeholders must simultaneously scale technology partnerships and value-addition capabilities to reduce long-term supply chain vulnerability.
From Import Dependency to Global Leadership
India stands at a critical crossroads in the global Rare Earth and Critical Minerals landscape. What was once considered a niche-mining sector has now become a core element of national security, industrial competitiveness, and geopolitical power. Rare Earth Elements (REEs) are indispensable for electric vehicles, renewable energy systems, defence equipment, electronics, and advanced manufacturing. Yet, the global supply chain of these minerals remains heavily skewed in the PRC’s favour , creating structural vulnerabilities for countries like India. According to industry estimates, over 21,000 jobs in India’s audio electronics segment were at risk following China’s rare-earth export curbs.[1]
At present, the PRC dominates nearly every segment of the rare-earth value chain. It accounts for approximately 76% of global rare earth production and over 90% of refining and processing capacity, even for ores sourced from other countries.[2] International reporting notes that the PRC retains a dominant position in rare-earth processing and magnet manufacturing, placing much of the downstream supply chain under its control.[3] This concentration has amplified supply vulnerability during periods of trade friction. As of 2024, the PRC produces around 270,000 metric tonnes annually, while the U.S. follows at a distant second with roughly 45,000 metric tonnes. India’s contribution, at about 2,900 metric tonnes, remains marginal despite possessing substantial geological potential.[4] This imbalance highlights not a lack of resources but a failure to convert reserves into strategic capacity. The PRC’s control extends beyond production into policy leverage. In April 2025, the PRC government introduced stricter export controls on rare earth magnets, requiring end-user certification and special export licences.[5] These measures have caused prolonged delays for Indian importers, directly impacting the automobile and electronics industries. This is not an isolated incident.[6] The PRC has repeatedly demonstrated its willingness to weaponise rare earth elements, most notably during its 2010 dispute with Japan. The current restrictions appear aimed at preventing the relocation of high-value manufacturing under the “China Plus One” strategy, thereby discouraging countries like India from emerging as alternative industrial hubs. In response, global powers have begun realigning their supply chains. The U.S. has launched initiatives such as Pax Silica, while forums such as the Quadrilateral Security Dialogue (QUAD), which is a strategic partnership comprising the United States, India, Japan, and Australia, have increasingly focused on critical mineral cooperation, supply chain resilience, and broader Indo-Pacific security coordination to reduce strategic dependencies on the PRC. Although India is not yet a core member of all such alliances, it is increasingly viewed as a necessary long-term partner due to its reserves, market size, and strategic alignment.
At present, the PRC dominates nearly every segment of the rare-earth value chain.
India itself has taken policy steps, including a USD 577 million scheme to promote domestic mining and processing of rare earths.[7] The Government of India, in the Union Budget 2026–27, outlined a strategic push for rare earth manufacturing, corridor development, and global supply chain integration as part of its broader critical minerals strategy.[8] However, the fundamental question remains: Despite possessing nearly 5.3% of global rare earth reserves (around 6.9 million tonnes), India’s production and processing capacity remains disproportionately low.[9] The answer lies in a complex mix of regulatory bottlenecks, technological gaps, environmental concerns, and delayed strategic prioritisation. Addressing these challenges is no longer optional. It is central to India’s economic sovereignty and geopolitical relevance in a rapidly fragmenting global order.
Red Tape and Policy Paralysis
The first and most important reason for India’s poor performance in rare-earth production is the sector’s monopoly. The Government of India had set up IREL (India) Limited, formerly known as India Rare Earths Limited (IREL), which enjoyed a complete government-backed monopoly over the mining and processing of key rare-earth minerals, including Monazite and beach sand. This control was based on provisions under the Mines & Minerals (Development & Regulation) Act and the Atomic Energy Concession Rules. This monopoly lasted from 1950 until March 2025, when the government finally allowed private-sector exploration of Rare Earth Elements (REEs).
The first and most important reason for India’s poor performance in rare-earth production is the sector’s monopoly.
Earlier, there were some attempts at reform. In 1998 and 2006, the government allowed licensed private firms to mine beach sands, but Monazite and other radioactive minerals still remained under IREL’s authority. Later, in 2016, under the Atomic Energy Concession Rules, the mining of Monazite was officially restricted to government-operated entities, further strengthening IREL’s monopoly.[10]
It was only in March 2025, through changes in the MMDR Act and related policy reforms, that private players were officially allowed to explore and mine REEs, thus ending IREL’s 75-year-long exclusive control. In contrast, the PRC opened up its rare earth sector to private companies in the 1990s, providing them with financial incentives, simplified laws, and support for processing infrastructure, which helped the PRC become a global leader in REE production. The second major reason is that India lacks downstream infrastructure, especially for separating and refining individual REEs from raw ore. The separation of Heavy Rare Earth Elements (HREEs) is a technically complex process, and in this field, the PRC is far ahead.
The third reason is the problem of policy paralysis and bureaucratic delays. The process of getting licenses, environmental clearances, and land acquisition involves excessive paperwork, lobbying, and long waiting periods—sometimes taking years. This discouraged private capital from entering the sector. While the PRC offers subsidies, easy land acquisition, and full support to local REE industries, India’s system continues to act as a barrier.
The fourth reason is the presence of Thorium, a radioactive element, in Monazite and other REE ores. Because of this, the Department of Atomic Energy (DAE) steps in with strict rules. Handling radioactive material requires high safety standards, which have prevented the development of an export-oriented rare-earth ecosystem in India.
The fifth issue is the demand-supply mismatch. In the PRC, rare earths are used in domestic electronics, EVs, defence systems, and industrial equipment, which creates huge local demand. India does not yet have such large-scale demand, especially given the limited domestic electronics manufacturing. As a result, private investors do not find the sector profitable, leading to low production and limited growth.
The sixth and final reason is weak investment in Research & Development (R&D). Extracting, purifying, and converting rare earths into high-grade magnets and products requires cutting-edge technology and continuous innovation. Unfortunately, India has spent very little on R&D in this sector. Although institutions like IITs and CSIR labs have made some efforts, there is still no dedicated national research program, unlike the PRC, which has heavily funded its REE research ecosystem.
Key REE Deposits and Exploration Sites
According to the latest USGS data and other trusted sources, India holds approximately 6.9 million metric tonnes of Rare Earth Oxide (REO) reserves. Across the globe, some of the key Rare Earth deposits are as follows:
- Bayan Obo (PRC): With about 40 million tonnes, this is the largest single Rare Earth deposit in the world;
- Mount Weld (Australia): Holds around 1.4 million tonnes, making it one of the biggest deposits outside the PRC;
- Telemark (Norway): Contains around 8.8 million tonnes and is considered Europe’s largest known Rare Earth deposit; and
- Steenkampskraal (South Africa): With around 0.6 million tonnes, this is the largest identified deposit in Africa.
Now, talking about India’s Rare Earth resource zones, here are the most significant regions and their geological characteristics:[11]
- Brahmagiri & NALCO Region (Odisha): These beachside deposits are rich in Monazite sands, which also contain Thorium, bringing the Department of Atomic Energy (DAE) into the picture.[12] This area is highly promising for both Light and Heavy Rare Earth Elements (LREE & HREE).
- Visakhapatnam Coast & Srikakulam (Andhra Pradesh): The beach sands here contain Monazite, Zircon, and Ilmenite. IREL has already processed ores from this region, and Rare Earths have been efficiently extracted.
- Manavalakurichi in Kanyakumari (Tamil Nadu): IREL operates a functional plant here that extracts REEs from Monazite.[13] The zone has confirmed coastal placer sand deposits. According to the Tamil Nadu Mines and Minerals Department, the state’s mineral wealth includes placer sands and associated monazite zones that host rare earth minerals.[14]
- Chavara (Kollam, Kerala): Another active mining zone with Monazite-rich sands, where IREL’s plant is already operational.
- East Singhbhum (Jharkhand): Surveyed by the Geological Survey of India (GSI), this area shows potential for Rare Earths in carbonatite complexes. Ores here also contain Niobium along with REEs.
- Barpedi & Durg Region (Chhattisgarh): This zone contains igneous rocks and alkaline intrusions with confirmed REE presence. Although still in the early exploration stage, results are promising.
- Betul & Shahdol (Madhya Pradesh): Exploration work has already been completed in this area, which contains Rare Earth-rich carbonatite rocks. Official reserve estimates have been made.
Rajasthan: The Sleeping Giant of India’s Rare Earth Future
Rajasthan has the potential to be a game-changer in India’s Rare Earth Element (REE) sector. The state has consistently surprised the country with its mineral discoveries The Barmer Oil discovery is a well-known example. Rajasthan is naturally rich in minerals, and due to its unique geological features, especially the Aravalli Range and alkaline intrusions, it holds strong potential for unlocking REE resources. It is now being seen as one of the most promising regions for rare-earth exploration, especially after confirmed findings at multiple sites.
- Delwara & Gulabpura Belt (Ajmer Region): The presence of Bastnaesite and Monazite-type minerals has been confirmed here. Bastnaesite is one of the primary ores of Light Rare Earth Elements (LREEs). The Geological Survey of India (GSI) has already published reports confirming the presence of fluorocarbonates and REE-bearing minerals;
- Alwar & Karauli Region: Surveys have shown REE enrichment in alkaline intrusive bodies and pegmatite veins. Exploration has confirmed key Rare Earth elements like Cerium (Ce), Lanthanum (La), and Neodymium (Nd) in this region;
- Barmer–Jalore Belt: This region shows REE potential in peralkaline granites and carbonatite complexes. The niobium-rare earth association seen here is especially useful for strategic metal extraction; and
- Udaipur & Rajsamand Belt: In this region, minerals containing uranium, thorium, and REEs have been discovered. The area consists of high-grade metamorphic rocks, which have always shown strong REE potential.
In summary, the state of Rajasthan has abundant Light REEs, which can be strategically used for manufacturing electric vehicle (EV) batteries, wind turbines, permanent magnets, and defence electronics. The GSI has marked several zones in Rajasthan as “Strategically Important REE Zones”. These zones have shown encouraging results for the economic exploitation of REEs. Agencies like the Mineral Exploration Corporation Limited (MECL) and the Atomic Minerals Directorate (AMD) have already conducted detailed surveys.[15]
Since the challenges and potential of India’s Rare Earth sector have now been discussed, it is important that we move forward with solutions to these challenges so we can fully benefit from high-potential zones like Rajasthan.
Strategic Tech and Policy Shifts for a National Rare Earth Mission
In global practices, the first key technology used for Rare Earth processing is called “Safe Chemical Separation” through a Solvent Extraction (SX) plant. In this process, Thorium is separated from REEs using acid leaching followed by multiple SX stages. After separation, the extracted Thorium is either safely stored through methods such as vitrification (glass containment) or cement encapsulation, or sent to nuclear R&D laboratories. A successful example of this model is Lynas Corporation’s Rare Earth plant in Malaysia, which demonstrates how international partnerships can help countries like Australia bypass the PRC while still supplying critical minerals through an environmentally safe, regulated refining setup. Independent expert review by the International Atomic Energy Agency found that implementation of radiation safety measures at the Lynas Malaysia rare-earth processing facility was satisfactory when assessed against IAEA safety standards.[16]
Independent expert review by the International Atomic Energy Agency found that implementation of radiation safety measures at the Lynas Malaysia rare-earth processing facility was satisfactory when assessed against IAEA safety standards.
The second emerging technology is Plasma Separation, currently in pilot stages in the U.S., Japan, and South Korea. This method uses electromagnetic plasma fields to achieve precise isotope separation. India can develop this technology through institutions such as DRDO and BARC, as well as private defence companies such as Tata Advanced Systems and L&T Defence.
The third method is Membrane-based Ion-Selective Separation, which is still under development in countries like Japan, South Korea, and across the European Union. This technology provides a safer, low-waste method for separating Thorium and REEs, making it ideal for pilot-scale projects in India under a Public-Private Partnership (PPP) model.
India already has the technical know-how in this field. Agencies such as the Bhabha Atomic Research Centre (BARC) and the Atomic Minerals Directorate (AMD) have developed pilot-scale technologies for Thorium extraction, radioactive waste handling, and Rare Earth separation. However, all this work is under complete government control, which limits the role of private innovation and capital involvement.[17]
Under the Critical Minerals Policy 2023 and the proposed changes in the Atomic Energy Act, 1962, India can move forward by forming joint ventures with private players under a moderate regulatory environment. There is also room to discuss the strategic disinvestment of IREL, allowing private expertise and funding to enter the sector. Additionally, India can sign a Technology Transfer Memorandum of Understanding (MoU) with countries such as Australia, France, Japan, or the USA that have significant expertise in safe REE separation and Thorium management.
As of now, India does not have a large-scale private Rare Earth separation facility. The only existing plants are run by IREL in Tamil Nadu and Kerala, and these are small-scale units. To scale up, India must launch dedicated programmes, such as a “National REE Mission”. This can help set up new processing plants, attract industrial entrepreneurs through Single Window Clearances, and boost capital investment. Finally, India should offer incentives to downstream industries, especially in the early stages, to stimulate local consumption and build a robust domestic value chain.
Emotional Activism and Legal Loopholes Undermining Strategic Projects
Another major concern that needs urgent attention is related to Environmental Clearances and Atomic Regulations. Most of these rules are either outdated or overlap with the present industrial scenario, causing confusion and delays. The Environmental Impact Assessment (EIA) is one such regulation. In force since 1994, it often causes project delays of around 2 to 5 years. India urgently needs to fast-track the EIA process.
A serious problem arises when activists and NGOs, lacking technical expertise, file PILs (Public Interest Litigations) in court, unnecessarily delaying critical projects. These actions often lead to investors pulling back due to prolonged uncertainty. To avoid such situations, there must be an oversight mechanism led by a Scientific Advisory Board to ensure that emotional activism does not disrupt technically and economically sound projects.
A serious problem arises when activists and NGOs, lacking technical expertise, file PILs in court, unnecessarily delaying critical projects.
Moreover, the constant tug-of-war between the Centre and State Governments regarding radioactive material handling slows down approvals. Moreover, the Forest Department often becomes a hidden barrier. Even if a project site is non-ecological, they sometimes reject files citing “Buffer-Zone” concerns, which may not be scientifically valid.
Departments like the Department of Atomic Energy (DAE) and the Ministry of Environment, Forest & Climate Change are often unwilling to loosen their “strategic control”. As a result, a deep-rooted bureaucratic culture persists. The entire Thorium sector is still treated as a “sensitive black box”. Allowing private players would require these departments to share revenues and create transparency, which threatens their file-based power structure.
However, regulations are still necessary but only if they are science-based, rational, and transparent. India can develop real-time radiation and effluent tracking systems using Blockchain and AI-powered monitoring technologies. Additionally, policymakers should establish a Radiation Handling Technology Certification Model to ensure smooth compliance and encourage private participation without compromising on safety.
India’s Untapped Nuclear Fuel from REE Mining
An integrated approach includes converting thorium into a usable, clean-energy fuel. Thorium is often called the “Future Fuel of India”, and rightly so. Many people do not realise that Thorium and Uranium, which are by-products of rare earth mining, especially from Monazite-rich sands, are not just radioactive waste but valuable nuclear resources.
Thorium, by itself, is not fissile, meaning it cannot directly fuel a reactor. However, when exposed to neutrons inside a nuclear reactor, it transforms into Uranium-233, which is a powerful nuclear fuel. India has already made significant R&D progress in this area, mainly through BARC (Bhabha Atomic Research Centre). One of its key developments is the Advanced Heavy Water Reactor (AHWR), which is specifically designed to run on Thorium-based fuel. This shows that Thorium can indeed be reused to produce clean nuclear energy over the long term. Likewise, Uranium recovered from REE ores can also be enriched and reused in India’s nuclear cycle.[18]
On the global front, companies like ThorCon (U.S./Indonesia), Moltex Energy (Canada/UK), Lightbridge (U.S.), and Copenhagen Atomics (Denmark) are already developing Thorium-based reactors. These companies can become strategic technology partners for India. Together, they can help build the first-ever mine-to-fuel ecosystem (a project where rare earths are mined, Thorium is separated, and then converted into nuclear energy), all within one regulated national framework.
On the global front, companies like ThorCon, Moltex Energy, Lightbridge, and Copenhagen Atomics are already developing Thorium-based reactors.
For this to happen smoothly, all radioactive material must be handled only by licensed and certified entities, and reactors should remain under the supervision of bodies like DAE, BARC, and NPCIL. If these conditions are met, even the current legal and safety challenges can be resolved without compromising public safety. In summary, such a multi-stakeholder collaboration is not only possible—it represents a historic opportunity for India to lead the world in clean energy innovation.
While elements of this approach exist internationally, a fully integrated mine-to-fuel rare earth and thorium energy system has not yet been comprehensively operationalised. While the PRC, the U.S., and Australia have done some work on Thorium reactors or rare-earth separation, no country has ever built a full-cycle system in which rare-earth mining leads to Thorium fuel production and energy generation. What I am proposing is truly original but scientifically possible. It is a model in which private mining firms extract and process rare earths, the by-product Thorium can be safely handed over to government-controlled or PPP-run reactor facilities, and clean energy is produced within a single national supply chain. India is in the best position to lead this because it has the reserves, the nuclear R&D, and now the policy momentum. This is a bold model, but with the right leadership, it can become India’s next strategic leap in clean energy and resource independence.[19]
Conclusion
If India moves forward wisely by embracing economic freedom and promoting a spirit of enterprise, these Rare Earth Elements (REEs) can significantly strengthen India’s position in the global electronics and clean technology value chain. India can challenge the global status quo and directly confront the PRC’s economic dominance in this crucial sector.
India already possesses significant strategic resources and institutional capacity to strengthen its position within the China Plus One framework. The critical requirement now is sustained political commitment and coordinated policy implementation. The civil servants and bureaucratic lobbies must start working with a clear focus on national interest rather than file-based control.
India already possesses significant strategic resources and institutional capacity to strengthen its position within the China Plus One framework.
The present decade represents a pivotal phase for India’s industrial and strategic transformation. It is a unique opportunity to realise the dream of becoming a global hub for electronics and clean technology. A calibrated regulatory framework that balances oversight with private-sector participation will be essential to strengthening India’s long-term economic competitiveness.
[1] The Economic Times, “Over 21,000 Jobs in Audio Electronics Segment at Risk Due to China’s Rare Earth Curbs, ELCINA Estimates,” March 8, 2024, https://economictimes.indiatimes.com/industry/cons-products/electronics/over-21000-jobs-in-audio-electronics-segment-at-risk-due-to-chinas-rare-earth-curbs-elcina-estimates/articleshow/122006141.cms.
[2] International Energy Agency, “With New Export Controls on Critical Minerals, Supply Concentration Risks Become Reality,” IEA Commentary, 2025, https://www.iea.org/commentaries/with-new-export-controls-on-critical-minerals-supply-concentration-risks-become-reality
[3] Andy Home, “China Primes Rare Earths Weapon as Trade War Escalates,” Reuters, April 11, 2025, https://www.reuters.com/world/china/china-primes-rare-earths-weapon-trade-war-escalates-andy-home-2025-04-11/
[4] U.S. Geological Survey, Mineral Commodity Summaries 2024: Rare Earths (Washington, DC: U.S. Department of the Interior, 2024), https://pubs.usgs.gov/periodicals/mcs2024/mcs2024-rare-earths.pdf
[5] Ministry of Commerce and the General Administration of Customs of the People’s Republic of China, Announcement No. 18 of 2025 on Implementing Export Control on Certain Medium and Heavy Rare Earth Items (Beijing, April 4, 2025), https://english.mofcom.gov.cn/Policies/AnnouncementsOrders/art/2025/art_0dd87cbee7b045bf93fabe6ab2faceee.html
[6] Tribune News Service, “India: Not averse to giving ‘end-user certificate’ to China for sourcing rare earths,” The Tribune, October 17, 2025, https://www.tribuneindia.com/news/india/india-not-averse-to-giving-end-user-certificate-to-china-for-sourcing-rare-earths
[7] India Brand Equity Foundation (IBEF), “Government Plans ₹5,000 Crore (USD ~577 Million) Boost for Rare Earths amid China Export Curbs,” accessed March 2026, https://www.ibef.org/news/government-plans-rs-5-000-crore-us-577-million-boost-for-rare-earths-amid-china-export-curbs.
[8] Press Information Bureau, India’s Rare Earth Strategy: Manufacturing, Corridors, and Global Integration (New Delhi: Government of India, February 2, 2026), https://www.pib.gov.in/PressNoteDetails.aspx?NoteId=157165&ModuleId=3®=3&lang=1
[9] Government of India, Ministry of Science and Technology, statement by Jitendra Singh in Parliament regarding India’s rare earth reserves, cited in. “India Has 8.52 Million Tonnes Reserves of Rare Earth Elements: Jitendra Singh” Press Report
[10] IREL (India) Limited, “Rare Earths,” accessed March 2026, https://www.irel.co.in/rare-earths.
[11] Press Information Bureau, Government of India, Government of India Organises First Rare Earth Conclave to Drive Development of Rare Earths and Value Chains in India (New Delhi: Ministry of Mines, August 30, 2025), https://www.pib.gov.in/PressReleasePage.aspx?PRID=2220193®=1&lang=1
[12] Ministry of Mines, Government of India, Lok Sabha Unstarred Question No. 469: Exploration and Value Addition of Rare Earth Elements (REEs) in Odisha, answered July 23, 2025, https://sansad.in/getFile/loksabhaquestions/annex/185/AU469_3GDHTQ.pdf?source=pqals
[13] A. V. Jeyagopal, “Geological Perspectives of Rare Earth Elements in India with a Special Reference to Tamilnadu: A Review,” Journal of Chennai Academy of Sciences 4 (2021): 57–65, https://tnasc.com/wp-content/uploads/2021/09/Jour4-457-65.pdf
[14] Government of Tamil Nadu, Department of Mines and Minerals, “Mineral Wealth – Tamil Nadu,” accessed March 2026, https://tnmines.tn.gov.in/mineral-wealth.php
[15] Department of Mines and Geology, Government of Rajasthan, Strategic Minerals (REE) and Other Economic Minerals near Barmer District (GR Nosar, Barmer): Interim Report 2020–21 (Jaipur: Government of Rajasthan, 2021), https://mines.rajasthan.gov.in/dmgcms/link_to_external_file/1.%20GR%20Nosar,%20Barmer.pdf.
[16] International Atomic Energy Agency, IAEA Concludes Follow-Up Review of Malaysia Rare Earth Plant (Vienna: IAEA Press Office, 17 October 2014), https://www.iaea.org/newscenter/pressreleases/iaea-concludes-follow-review-malaysia-rare-earth-plant.
[17] A. Kumar, R. Srivenkatesan, and R. K. Sinha, “On the Physics Design of Advanced Heavy Water Reactor (AHWR),” International Atomic Energy Agency, 2025, https://www-pub.iaea.org/MTCD/publications/PDF/P1500_CD_Web/htm/pdf/topic3/3S03_A.%20Kumar.pdf.
[18] Bhabha Atomic Research Centre (BARC), “Thorium Fuel Cycle for AHWR and Related Research,” Department of Atomic Energy, Government of India, accessed March 2026, https://www.barc.gov.in/randd/tfc.html.
[19] Bhabha Atomic Research Centre (BARC), Advanced Heavy Water Reactor (AHWR), Department of Atomic Energy, Government of India, accessed March 2026, https://www.barc.gov.in/randd/ahwr.html.
