India’s ₹500 Billion Rare Earth Production Plan Accelerates

On June 21, 2025, The Times of India reported that India is considering a ₹350-500 billion rare earth production plan to boost domestic raw material and magnet production, with approval expected within two weeks. This move aims to reduce India’s reliance on Chinese rare earth products.

China is a dominant force in the global rare earth sector, leading in reserves, production, and export volumes. According to the U.S. Geological Survey, as of the end of 2024, China holds 44 million tons of rare earth reserves, accounting for 48.89% of the global total (90 million tons), while India’s reserves are 6.9 million tons, or 7.67%. In 2024, China’s rare earth production reached 270,000 tons, comprising 69.23% of the global total (390,000 tons), compared to India’s 2,900 tons, or 0.74%. This highlights China’s significant lead over India in both reserves and output.

Following China’s announcement on April 4, 2025, to impose export controls on seven mid-to-heavy rare earth items, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium, industries in India and other countries, such as automotive and semiconductor sectors, have faced varying impacts. Electric vehicles (EVs) and wind turbines are key applications for rare earth elements in India, accounting for over 50% of the projected domestic demand of 4,010 metric tons in 2025, with total demand expected to rise to 8,220 metric tons by 2030.

To counter the impact of China’s export restrictions, India is adopting a multi-pronged strategy to localize its rare earth supply chain. Beyond the ₹350-500 billion plan to increase domestic production, India is set to launch a domestic rare earth magnet production incentive program. Additionally, amendments to the Mines and Minerals (Development and Regulation) Act are proposed to support critical mineral development initiatives. India aims to initiate small-scale commercial production of rare earth permanent magnets by the end of this year, with the Ministry of Science and Technology providing financial support to Hyderabad-based Midwest Advanced Materials Private Ltd to accelerate technology implementation.

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