Rare earths are new assets: India to become credible alternative in critical mineral game; here's how

Rare earth elements or REEs have made their way as the new strategic assets, emerging as the ‘new oil’ of the 21st century, as countries race towards cleaner energy. REEs are a set of 17 metals vital for their use in a range of devices like electric vehicles, wind turbines, smartphones and defense systems."Invisible to most, rare earths are quietly powering the shift toward cleaner energy, stronger economies, and a smarter, more sustainable world," a new report by Kotak Mutual Fund said.Where India’s ‘new oil’ stands?India, home to about 6% of the world’s rare earth reserves, is positioning itself as a potential alternative supplier. Although its current production accounts for less than 1% globally, states like Kerala, Tamil Nadu, Odisha, Andhra Pradesh, and Gujarat hold significant promise for the future. The government has launched the National Critical Mineral Mission (2025) to boost exploration, mining, and processing. A key step came with IREL (India) Limited being removed from the US export control list, opening doors for international collaboration. IREL’s upcoming facility in Visakhapatnam will produce samarium-cobalt magnets domestically, strengthening India’s tech self-reliance.Through initiatives like KABIL (Khanij Bidesh India Limited) and the US-led Mineral Security Partnership, India is asserting its role in the global critical mineral market.

Though China is the dominant supplier, producing around 70% of rare earths and refining 90%, India is expected to reshape the balance with countries like the US and Australia seeking diversification. But the report notes, "China's share is expected to fall from 69% to 51% in mining and 90% to 76% in refining by 2030, according to the IEA. This trend reflects a broader international effort to develop more balanced and resilient supply chains," the report highlighted.Reforms under the Mines and Minerals (Development and Regulation) Act and Production Linked Incentive schemes are encouraging private investment, research, and sustainable processing, all historically difficult areas.With demand projected to rise 300–700% by 2040, India’s rare earth ambitions could secure domestic supply chains and position the country as a leader in clean technology under the ‘Make in India’ initiative."Demand for rare earth elements (REEs) will surge as the world shifts to clean energy and digital technologies, with usage projected to rise 300-700% by 2040," the report added.India’s emergence in the rare earth landscape is more than just a mineral opportunity, rather it is the entry gate to industrial resilience, advanced technology and strategic autonomy.