India currently holds world’s third-largest rare earth reserves, estimated at approximately 6.9 to 7.23 million tonnes (roughly 6-8% of global reserves). Despite this, India’s contribution to global production remains less than 1%, creating a significant resource-production gap.
Geographic Distribution
Indian REEs are primarily found in two types of deposits:
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Secondary (Placer) Deposits: These are found in monazite-bearing beach sands along coastal states. These sands are rich in Light REEs (LREEs) like Neodymium and Cerium.
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Primary (Hard Rock) Deposits: Recent exploration has identified significant in-situ resources in hard-rock terrains of Rajasthan (Barmer, Sirohi, and Udaipur) and Gujarat (Amba Dungar).
| Region | Primary Source | Key States |
| Coastal Belts | Monazite Beach Sands | Andhra Pradesh, Odisha, Tamil Nadu, Kerala |
| Inland/Hard Rock | Carbonatites & Granites | Rajasthan, Gujarat, Jharkhand, West Bengal |
Strategic Importance in 2026
Indian government has classified REEs as critical minerals because they are indispensable for three core pillars of India’s 2026-2030 vision:
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Green Energy Transition: Neodymium, Praseodymium, and Dysprosium are essential for permanent magnets used in Electric Vehicle (EV) motors and wind turbines.
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Defense & Aerospace: Used in precision-guided missiles, stealth technology, jet engines, and satellite communication.
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Consumer Electronics: Essential for high-resolution displays, fiber optics, and semiconductors.
Current Policy Shifts & Initiatives
To bridge gap between reserves and production, Indian government has launched several aggressive policies in late 2025 and early 2026:
1. National Critical Mineral Mission (NCMM)
Launched to secure a sustainable supply of 30 critical minerals. It encourages private sector participation in mining, which was previously a state monopoly under Indian Rare Earths Limited (IREL).
2. Rare Earth Permanent Magnet (REPM) Scheme
In January 2025, a ₹7,280 crore incentive scheme was approved to establish a domestic ecosystem for manufacturing magnets. The goal is to reach a capacity of 6,000 metric tonnes per annum (MTPA) by 2027.
3. 2026 Tailings Policy
A groundbreaking policy announced in January 2026 focused on a circular economy. It mandates recovery of rare earth minerals from tailings (mine waste) and slag from existing copper, aluminum, and iron mines.
Challenges to Self-Reliance
Despite the vast reserves, India faces three major bottlenecks:
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The Thorium Complication: Most Indian REEs are found in monazite sands, which also contain Thorium, a radioactive element. This subjects mining to strict Atomic Energy regulations, slowing down private investment.
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Separation Technology: While India can extract mixed rare earth concentrates, it has historically lacked the advanced solvent extraction technology needed to separate individual high-purity heavy REEs.
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China’s Dominance: China still controls nearly 90% of global refining capacity. India is currently working with partners like Japan and US-led Minerals Security Partnership (MSP) to build alternative processing hubs.
Did you know? Neodymium magnets are so powerful that a piece size of a coin can lift a weight 1,000 times its own mass. This strength is what allows EV motors to be compact yet powerful.
Future Outlook
By the end of 2026, India is expected to see its first private-sector rare earth processing plants go into pilot testing. The focus is shifting from being a raw material exporter to a high-value magnet manufacturer.