India Ranks Third in Rare Earth Reserves but Lags in Production Due to Structural Mining Bottlenecks

New Delhi | India holds the world’s third-largest reserves of rare earth elements, yet its actual production remains far below potential due to long-standing structural bottlenecks in the mining and processing ecosystem, industry experts and policymakers have noted.

Despite abundant geological availability, India’s rare earth output is constrained by regulatory hurdles, limited private sector participation, and gaps in advanced extraction and separation technologies. Rare earth elements are critical inputs for clean energy technologies, electric vehicles, electronics, defence systems, and high-end manufacturing, making their availability a strategic priority.

Currently, most rare earth exploration and production activities are dominated by IREL (India) Limited, a government-owned enterprise. While IREL has expanded capacity in recent years, experts argue that monopoly-led operations alone are insufficient to scale production rapidly in line with global demand.

One of the key challenges lies in complex environmental and coastal regulation frameworks, as many rare earth deposits are found in beach sand minerals. Lengthy approval processes and overlapping clearances often delay project execution. Additionally, India lacks adequate downstream processing infrastructure, forcing dependence on imports for high-purity separated rare earths and finished components.

Another major constraint is technology. Rare earth mining is not just about extraction but also about complex chemical separation processes, an area where countries like China have built decades of expertise. India’s limited access to such technologies has slowed commercial-scale production and value addition.

In response, the government has begun taking steps to address these gaps by reviewing mining policies, encouraging strategic partnerships, and exploring global collaborations to secure technology transfer. Policymakers have also highlighted the need to bring in private investment and build an integrated rare earth supply chain from mining to manufacturing.

As global supply chains diversify away from concentration risks, India’s vast reserves offer a significant opportunity. However, analysts caution that unless regulatory, technological, and structural challenges are resolved in a coordinated manner, the country may continue to trail in rare earth production despite its strong resource base.