India is working to expand its domestic rare earth element (REE) production in response to recent global supply shortages. With restrictions affecting auto manufacturers across major economies, Indian officials are exploring ways to leverage Indian Rare Earths (IREL), a state-owned company, to boost local REE output.
India’s Federal Minister of Commerce and Industry Piyush Goyal called the supply constraints a “wake-up call” and emphasized India’s opportunity to become a viable alternative in the global market. Geoffrey Pyatt, senior managing director at McLarty Associates, echoed the sentiment, highlighting the potential for deeper U.S.-India collaboration on rare earths.
Despite current limitations in refining and separation technology, India holds substantial rare earth deposits. The U.S. Geological Survey estimates India’s reserves at 6.9 million tons, making it the third-largest globally after Brazil, and China. Additionally, nearly 35% of the world’s beach and sand mineral deposits — critical sources of REEs — are located in India.
To strengthen its rare earth production capacity, India launched the National Critical Mineral Mission in 2025. The initiative aims to reduce dependence on external sources by improving mining, refining, and processing infrastructure. The government encourages private sector to participate in its incentive programs and capital subsidies as officials recognize the need for industry collaboration to enhance innovation and scalability.
A key hurdle in India’s REE ambitions remains the lack of advanced refining technology and specialized technical expertise. Currently, the country contributes less than 1% of global REE production, making industrial-scale development essential for positioning itself as a reliable supplier.
Booming domestic demand across sectors such as electric vehicles, electronics, and defense, offers a strong incentive for investment. Analysts note that India’s dual role as both a supplier and consumer increases the likelihood of sustained government and private sector efforts.
To further diversify supply chains, India is actively seeking alternatives beyond its own reserves, with a delegation of auto industry representatives exploring new sourcing options. Meanwhile, infrastructure improvements — including the ongoing development of an IREL rare earths magnet plant — signal progress toward self-reliance.
Last updated: December 26th, 2025
