India is set to triple the size of its rare earth plan to more than ₹7,000 crore ($788 million) as it races to establish domestic capacity in a sector dominated by China. The offer awaiting cabinet approval marks a significant shift from a previous $290 million strategy that aimed to secure electric vehicles, renewable energy, and defence, but the final allocation could still change.
India is collaborating with various nations to develop a supply chain for rare earth magnets, following China’s lead, which processes about 90% of the global output. China tightened export controls in April amid its trade dispute with the US, disrupting supplies for automobile manufacturers worldwide.
At the beginning of this year, Prime Minister Narendra Modi warned that critical minerals should not be weaponised while calling for a stable and diversified global supply chain. Earlier in September, the cabinet approved a scheme worth Rs 1,500 Crore to promote critical minerals recycling in the country. This initiative aims to improve the nation’s recycling capacity for separating and producing critical minerals.
The South Asian nations’ plans for rare earth expansion align with global efforts to reduce reliance on China. However, they face difficulties due to limited funding, expertise, and long project timelines. State-owned companies with domestic production that still receive nonviable subsidies are directing their early efforts to secure overseas mining partnerships.
