Introduction

As of December 2025, a report by Amicus Growth reveals that India has secured the third-largest reserves of Rare Earth Elements (REE) globally, possessing 6.9 million tonnes (MT) of Rare Earth Oxide (REO). This represents approximately 6% to 7% of the world’s total reserves. Despite this significant resource wealth, India’s production capacity remains disproportionately low, ranking 7th globally with less than 1% of total world production in 2024.

To address this gap and leverage these critical minerals for modern technologies like Electric Vehicles (EVs), clean energy, and defense, the Government of India (GOI) has launched massive financial initiatives. These include the ₹16,400 crore National Critical Mineral Mission (NCMM) and a ₹7,280 crore scheme specifically targeting the manufacturing of sintered Rare Earth Permanent Magnets (REPM). The primary challenges facing the domestic industry include heavy regulation due to the radioactive nature of monazite-rich sands and a historical lack of private sector participation.

Global Landscape of Rare Earth Reserves

The distribution of rare earth reserves is highly concentrated, with a few nations holding the majority of the world's REO.

Top 10 Countries by Rare Earth Reserves (2025)

The Production Paradox: Reserves vs. Output

While India holds the third-largest reserves, its actual production output lags significantly behind other nations. In 2024, India produced only 2,900 tonnes, placing it 7th in the world.

Top Global Producers (2024)

• China: 270,000 tonnes (1st place)

• USA: 45,000 tonnes (2nd place)

• Myanmar: 31,000 tonnes (3rd place)

• Nigeria, Thailand, Australia: ~13,000 tonnes each

• India: 2,900 tonnes (7th place)

Constraints on Indian Production

The disparity between India’s reserves and its output is driven by several systemic and geological factors:

• Regulatory Hurdles: Most Indian REEs are found in monazite-rich coastal sands. These sands contain thorium, a radioactive element, leading to stringent regulations that discourage private investment.

• Infrastructure and Technology: The industry suffers from aging technology, outdated infrastructure, and limited domestic refining and processing capabilities.

• Investment: Historically, there has been low participation from the private sector in the mining and processing of these elements.

Technical Composition of Rare Earth Elements (REE)

REEs consist of 17 metallic elements categorized by their weight and properties. They are prized for their unique magnetic, chemical, and optical characteristics.

1. Light Rare Earth Elements (LREEs)

• Lanthanum (La)

• Cerium (Ce)

• Praseodymium (Pr)

• Neodymium (Nd)

• Promethium (Pm)

• Samarium (Sm)

2. Heavy Rare Earth Elements (HREEs)

• Europium (Eu), Gadolinium (Gd), Terbium (Tb), Dysprosium (Dy), Holmium (Ho), Erbium (Er), Thulium (Tm), Ytterbium (Yb), Lutetium (Lu)

• Yttrium (Y) and Scandium (Sc)

Government of India (GOI) Strategic Initiatives

To modernize the industry and secure supply chains for essential sectors like electronics and defense, the GOI has introduced two major frameworks:

National Critical Mineral Mission (NCMM)

Launched in 2025 under the Ministry of Mines, this mission is designed to strengthen the supply of minerals essential for clean energy and modern tech.

• Budget: ₹16,400 crores.

• Duration: Seven years (FY25 to FY31).

• Focus Areas: Electric Vehicles (EV), solar panels, electronics, defense systems, and clean energy industries.

Scheme for Sintered Rare Earth Permanent Magnets (REPM)

Approved in November 2025, this scheme aims to build a domestic manufacturing ecosystem for high-end magnets.

• Budget: ₹7,280 crores (₹6,450 crores for sales-linked incentives; ₹750 crores for capital subsidy).

• Duration: Seven years (FY26 to FY32).

• Structure: Includes a 2-year facility setup period followed by 5 years of production and sales incentives.

Institutional Oversight

The development of India’s rare earth sector is managed by the Ministry of Mines (MoM):

• Union Minister: G Kishan Reddy (Secunderabad, Telangana).

• Minister of State (MoS): Satish Chandra Dubey (Rajya Sabha, Bihar).