India’s Rare Earth Reserves Lag in Production

India holds the world’s third-largest reserves of rare earth elements, yet its production remains marginal on the global scale. A recent report highlights a persistent mismatch between India’s resource endowment and its actual output, underlining deep structural and regulatory bottlenecks in the mining and processing ecosystem.

India’s Position in Global Rare Earth Reserves

According to the report by Amicus Growth, India possesses about 6.9 million tonnes of rare earth oxide reserves. This places it behind only China, with around 44 million tonnes, and Brazil, with nearly 21 million tonnes. Other significant reserve holders include Australia, Russia, Vietnam, and the United States. Despite accounting for nearly 6–7 per cent of global reserves, India’s contribution to global supply remains negligible.

Low Production Despite Abundant Resources

In 2024, India produced only about 2,900 tonnes of rare earth elements, ranking seventh globally. This is starkly lower than China’s output of 270,000 tonnes, which firmly establishes its dominance. The United States followed with 45,000 tonnes, while Myanmar produced around 31,000 tonnes. Australia, Thailand, and Nigeria reported production levels of roughly 13,000 tonnes each. India’s output accounts for less than 1 per cent of global production.

Regulatory and Geological Constraints

A major constraint lies in the nature of India’s deposits. Most reserves occur in monazite-rich coastal sands that also contain thorium, a radioactive element. This complicates mining and processing and places operations under strict regulatory oversight. Historically, rare earth mining was tightly controlled and largely undertaken by Indian Rare Earths Limited, where rare earths were treated as secondary by-products rather than strategic minerals.

Imporatnt Facts for Exams

• India holds around 6–7% of global rare earth oxide reserves.
• Monazite sands are India’s primary rare earth source and contain thorium.
• China controls nearly 90% of global rare earth refining capacity.
• Rare earth elements are critical for electronics, defence, and clean energy technologies.

Processing Gaps and Strategic Implications

Beyond mining, limited processing and refining capacity remains India’s biggest weakness. China dominates nearly the entire value chain, especially in heavy rare earth processing. India’s role in global rare earth trade is minimal, with only small-scale initiatives such as a Japan-linked joint venture in Visakhapatnam. The report concludes that India’s challenge is not resource scarcity but inadequate execution, weak value-chain integration, and insufficient processing infrastructure.