Can China's rare earth export control boost India's chances as alternative?

As China restricted the export of rare earth minerals, India, with a sizeable amount of these strategically important materials, can emerge as a viable alternative to Beijing, said a research report. These rare elements are vital for the productionand design of electric vehicles, wind turbines, smartphones, and defence systems. Due to their indispensabilityfor modern equipment, experts dub them the "new oil" of the 21st century.

"Invisible to most, rare earths are quietly powering the shift toward cleaner energy, stronger economies, and a smarter, more sustainable world," noted the report by Kotak Mahindra.

India accounts for 6 per cent reserves of rare earth. With China -- the largest processor of rare earth elements in the world -- limiting the supply of the materials, India has emerged as a credible alternative source. New Delhi, however, currently contributes less than one percent of the world's REE production.

However, India's vast land mass and coastal states offer a promise for the future, the report added.

Under the National Critical Mineral Mission (2025), India has prioritized the exploration, mining, and processing of these critical resources. The recent removal of IREL (India) Limited from the US export control list marks a pivotal step, paving the way for enhanced global collaboration.

It said that IREL's Visakhapatnam facility will produce samarium-cobalt magnets domestically. It has also launched the KABIL (Khanij Bidesh India Limited) initiative and participated in the US-led Mineral Security Partnership (MSP).

China accounts for 70 per cent of the mining of rare earth materials and 90 per cent of the processing. The report predicts that China's shares will fall to 51 per cent and 78 per cent by 2030, which would create a requirement for the creation of a more stable supply line.

What's India doing?

New Delhi has reformed the Mines and Minerals (Development and Regulation) Act (MMDR). It has also introduced Production Linked Incentive (PLI) schemes, and is encouraging private investment, R&D, and sustainable processing.

India's progress in the field will secure domestic supply and make it a global leader in the sector.

"Demand for rare earth elements (REEs) will surge as the world shifts to clean energy and digital technologies, with usage projected to rise 300-700 per cent by 2040," noted the report.