India to establish strategic reserve of rare earth elements amid China export curbs

India is preparing to launch a National Critical Mineral Stockpile in response to Beijing's tightening grip on rare earth exports, seeking to build a two-month reserve of elements vital to electric vehicles, wind turbines and other green technologies.

The initiative marks New Delhi's latest effort to reduce dependence on Chinese supplies following export restrictions on rare earth magnets that have disrupted global manufacturing chains. Officials said the programme would initially prioritise rare earth elements before expanding to encompass a broader range of strategic minerals.

"We are looking to create a two-month stockpile of rare earth elements under the programme, with a focus on private player participation," a senior government official told the Economic Times. "The initial focus is on rare earth elements. The scope will later expand to include other critical minerals."

Strategic imperative

The stockpiling programme complements a Rs7,300 crore ($870mn) incentive scheme approved by an inter-ministerial panel to promote domestic production of rare earth magnets. The government has set a target of producing 6,000 tonnes over five years under the scheme.

Rare earth elements comprise 17 chemically similar materials crucial for advanced technologies, particularly in magnetic and electrical applications. China's dominance in rare earth processing has given Beijing significant leverage over global supply chains, prompting consumer nations to seek alternative sources.

Under India's National Critical Minerals Mission, authorities have allocated Rs500 crore to "guard against supply disruptions and ensure mineral availability for domestic use." The initiative comes as geopolitical tensions over rare earth supplies intensify, with US President Donald Trump recently threatening 100 per cent tariffs on Chinese imports in response to Beijing's export controls.

Domestic constraints

Industry experts caution that India faces significant technological challenges in extracting rare earths from its domestic reserves, with most supplies currently imported. The country is estimated to possess 7.23mn tonnes of rare earth oxide contained within 13.15mn tonnes of monazite deposits spread across eight states, including Andhra Pradesh, Odisha, Tamil Nadu and Kerala.

The ministry of mines has conducted five tranches of auctions for critical and strategic mineral blocks, awarding 34 of 55 blocks offered. A sixth auction round was launched last month to accelerate domestic mining capacity.

Sector specialists noted that whilst stockpiling represents a necessary safeguard, India's limited extraction and processing capabilities remain a fundamental constraint. The country's ability to leverage its geological resources will depend on developing indigenous refining technologies and attracting investment in downstream processing facilities.