A new report by Amicus Growth has cast a spotlight on a significant “resource-output gap” in India’s critical minerals sector. While India holds approximately 6.9 million tonnes of rare earth oxide (REO) reserves—the third-largest in the world—it contributed less than 1% of global production in 2024.
This disparity places India in a unique strategic bind: it possesses the raw geological wealth to be a global superpower in green energy and defense technology, yet remains heavily dependent on imports for the finished components that power them.
The Numbers: Reserves vs. Reality
According to the data, India follows only China (44 million tonnes) and Brazil (21 million tonnes) in terms of reserves. However, the production rankings tell a different story:
Global Leaders: China produced 270,000 tonnes in 2024, followed by the United States (45,000 tonnes).
India’s Position: India produced just 2,900 tonnes, ranking seventh globally.
Structural Bottlenecks: The “Thorium” Complication
The report identifies several key reasons why India’s vast reserves aren’t reaching the market:
Radioactive Complexity: Most of India’s rare earths are found in monazite-rich coastal sands. These sands also contain thorium, a radioactive element. This makes mining a high-stakes regulatory challenge, restricted primarily to state-run entities like Indian Rare Earths Limited (IREL).
Strategic Neglect: For decades, rare earths were treated as minor by-products rather than strategic assets. This led to a lack of investment in modern extraction and refining technologies.
Processing Monopoly: Even if India mines the ore, the “chokepoint” remains refining. China currently controls roughly 90% of global refining capacity. India lacks the integrated facilities to convert raw ore into the high-purity metals required for high-tech manufacturing.
The 2025 Pivot: Moving Beyond Mining
In response to these challenges, the Indian government has launched a decisive policy shift in late 2025. The National Critical Mineral Mission (NCMM) and a new ₹7,280 crore (~$870 million) incentive scheme aim to build a fully integrated ecosystem.
Rather than just focusing on “digging,” the new strategy prioritizes the production of Sintered Rare Earth Permanent Magnets (REPM). These magnets are the “brains” of electric vehicle (EV) motors and wind turbines. By targeting the high-value end of the supply chain, India hopes to achieve “processing sovereignty” and reduce its 80% dependence on Chinese imports.
Experts suggest that while India’s challenge isn’t a lack of resources, it is a race against time. With global demand for rare earths projected to rise by up to 700% by 2040, India’s success in overcoming these structural bottlenecks will determine whether it becomes a global clean-tech hub or remains a sidelined giant in the critical minerals race.
