India ranks third globally in rare earth reserves, with approximately 6.9 million tonnes of rare earth oxides (REO), trailing only China and Brazil. Despite this, the country’s actual production is extremely low, highlighting a wide gap between its resource potential and output.
In 2024, India produced just 2,900 tonnes of rare earth elements (REEs), placing it seventh in global production rankings, far behind China, which produced about 270,000 tonnes, and the United States at roughly 45,000 tonnes. Other moderate producers include Myanmar, Australia, Thailand, and Nigeria, each producing around 13,000 tonnes. India’s global share in rare earth production is below 1%, despite accounting for 6–7% of global reserves.
The report identifies several factors behind this underperformance. Most of India’s reserves are in monazite-rich coastal sands, which contain thorium, a radioactive element. This has led to strict regulatory controls, slowing exploration and extraction. Historically, rare earth mining was largely conducted by Indian Rare Earths Limited (IREL), where rare earths were treated as by-products rather than strategic resources, limiting focused development.
Another major constraint is processing capacity. Global rare earth refining is dominated by China, which controls around 90% of processing capacity, particularly for heavy rare earths used in advanced technologies. India lacks sufficient processing infrastructure, meaning most extracted material cannot be refined domestically. This dependence on imports limits value addition and prevents India from establishing a complete REE value chain.
Some steps are being taken to improve the situation. For instance, a Japan-linked joint venture in Visakhapatnam aims to develop rare earth processing capabilities. However, industry experts note that progress remains slow.
Analysts emphasize that without regulatory reform, investment in refining, and a comprehensive domestic value chain, India will continue to underutilize its large reserves. Unlocking the potential of rare earths is seen as crucial for India’s technological self-reliance and competitiveness in global high-tech industries, including electric vehicles, renewable energy, and electronics.
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