India’s Rare Earth Potential: A New Player in Clean Energy Race
India is positioning itself as a credible global alternative in the billion-dollar rare earth elements market, holding 6% of the world’s reserves according to a Kotak Mutual Fund research report. With demand projected to surge up to 700% by 2040, the country’s vast geological potential could reshape global supply chains.
Key Takeaways
- India holds 6% of global rare earth reserves but contributes less than 1% to production
- Demand for rare earth elements expected to increase 300-700% by 2040
- China’s dominance expected to decline from 69% to 51% in mining by 2030
- India’s coastal states including Kerala, Tamil Nadu, and Odisha hold significant potential
Strategic Initiatives and Reforms
Under the National Critical Mineral Mission (2025), India has prioritized exploration, mining, and processing of these critical resources. The recent removal of IREL (India) Limited from the U.S. export control list marks a pivotal step toward enhanced global collaboration.
IREL’s upcoming Visakhapatnam facility will produce samarium-cobalt magnets domestically, representing a major milestone toward technological self-reliance. Through initiatives like KABIL and participation in the US-led Mineral Security Partnership, India is asserting its growing geopolitical importance.
Global Context and China’s Dominance
China currently dominates the rare earth supply chain, accounting for approximately 70% of mining and 90% of refining. However, the International Energy Agency projects China’s share will decline to 51% in mining and 76% in refining by 2030.
“This trend reflects a broader international effort to develop more balanced and resilient supply chains,” the report highlights.
Domestic Reforms and Future Outlook
Backed by reforms under the Mines and Minerals Act and Production Linked Incentive schemes, India is encouraging private investment, R&D, and sustainable processing. These address traditional challenges in rare earth element production.
As the world moves toward an energy-secure, low-carbon future, India’s rare earth push represents more than a mineral opportunity—it’s a pathway to industrial resilience, technological advancement, and strategic autonomy under the ‘Make in India’ initiative.
