The world needs an alternative to China for rare earth elements (REEs). With 6% of global reserves and new policies, India is stepping up. Learn how India plans to win the "new oil" game.
In the 21st century, a new strategic asset is becoming as important as petroleum. They are called Rare Earth Elements (REEs), and many experts now call them the "new oil." These 17 metals are the hidden ingredients that power our modern world. You find them in electric vehicle (EV) motors, wind turbines, smartphones, and advanced defense systems.
As the world races toward cleaner energy, a new report from Kotak Mutual Fund notes, "Invisible to most, rare earths are quietly powering the shift toward cleaner energy, stronger economies, and a smarter, more sustainable world."
But this global shift has a big problem: the supply chain is controlled almost entirely by one country. This is where India sees a massive opportunity to step in.
The Global Challenge: China's REE Dominance
For decades, China has built a near-monopoly over the rare earth market. This creates a serious risk for every other major economy, including India, the United States, and Europe.
Here are the facts: China currently mines about 70% of the world's rare earths. More importantly, it refines (processes) nearly 90% of the global supply. This processing stage is the most difficult and critical part of the chain. This dominance gives China the power to control prices and supplies, a risk many countries are no longer willing to accept.
India's Big Opportunity: A Credible Alternative
The world is desperately searching for a new, reliable partner. This is where India is positioning itself as a credible alternative.
According to geological surveys, India holds about 6% of the world's rare earth reserves. These large deposits are found in states like Kerala, Tamil Nadu, Odisha, and Andhra Pradesh. The challenge? Until now, India's actual production was tiny—less than 1% of the global total. But this is changing fast.
How India is Planning to Win the "New Oil" Game
The Indian government is moving aggressively with a multi-step strategy. This plan is not just about digging minerals. It is about building an entire supply chain, from mining to processing the final, high-value magnets.
The government has launched the National Critical Mineral Mission (2025). Its main goal is to boost local exploration, mining, and—most importantly—processing technology. New reforms to the Mines and Minerals (MMDR) Act are also encouraging private companies to invest in this sector, which was historically difficult.
A major win came when IREL (India) Limited was removed from a US export control list. This opens the door for international collaboration. IREL is already building a new facility in Visakhapatnam to produce samarium-cobalt magnets, a key step for 'Make in India' in high-tech.
- Securing Assets Abroad: The KABIL Mission
India also knows it must secure minerals that are not available locally (like lithium and cobalt). It has formed a state-owned company called KABIL (Khanij Bidesh India Limited). KABIL's only job is to acquire mineral assets in other countries.
Building Global Partnerships
India is not working alone. It has joined the US-led Mineral Security Partnership (MSP). This is a group of allied countries working together to build a secure and stable supply chain that does not depend on China.
The Future: A New Balance of Power
This global effort is expected to show results. The International Energy Agency (IEA) forecasts that by 2030, China's dominance will decrease. The IEA predicts China's share of mining will fall from 69% to 51%, and its refining share will drop from 90% to 76%. India is working to be a major part of that new, balanced supply chain.
The urgency is real. The Kotak Mutual Fund report added that demand for REEs is projected to surge by 300% to 700% by 2040.
India's emergence in the rare earth landscape is more than just a mineral opportunity. It is the gateway to industrial resilience, advanced technology, and strategic autonomy for the future.
