Ricky Chopra NEW DELHI: India is accelerating its efforts to secure critical mineral supply chains amid rising geopolitical uncertainty and continued global dependence on China, but structural challenges in production and processing remain significant hurdles.

Critical minerals—particularly rare earth elements such as lanthanides, scandium, and yttrium—are essential for clean energy technologies, electric vehicles, and advanced electronics. While India has made major policy strides, its current production accounts for less than 1% of global output, underscoring the gap between ambition and capacity.

At the center of India’s strategy are sweeping regulatory reforms under the Mines and Minerals (Development and Regulation) Act, 1957, including its 2023 amendment, which opened the sector to private players and ended the near-monopoly of public sector undertakings in rare earth mining. The move is aimed at attracting investment and accelerating exploration.

The government has also launched the National Critical Mineral Mission in 2025, with an outlay exceeding ₹16,000 crore, to build a resilient and integrated supply chain. Complementing this is a new policy framework for exploration and recovery of critical minerals, supported by GIS-based resource mapping to improve transparency and efficiency.

In a bid to move up the value chain, New Delhi approved a ₹7,280 crore incentive scheme in late 2025 to promote domestic manufacturing of Rare Earth Permanent Magnets (REPM), crucial for electric vehicles, defense systems, and electronics. This marks a strategic shift from mere resource extraction to developing high-tech manufacturing capabilities.

Earlier reforms had already enabled exploration licenses of up to seven years and opened 46 mineral blocks for auction, alongside liberalized foreign direct investment norms. Additional measures—such as reducing royalty rates to 1% for rare earth oxides and removing certain minerals from the atomic category—have further boosted investor sentiment.

However, industry experts point to persistent bottlenecks. India continues to rely heavily on imports of finished rare earth products, particularly magnets. Limited midstream processing capacity, delays in land acquisition, and environmental clearances have slowed project execution. Additionally, key domestic resources such as monazite are often associated with thorium, placing them under stringent regulatory controls.

To mitigate supply risks, the National Mineral Exploration Trust has been authorized to support overseas asset acquisition, while India strengthens global partnerships through initiatives like the Minerals Security Partnership and the Quadrilateral Security Dialogue.

Domestically, India is estimated to hold around 6.9 million tonnes of rare earth reserves, with emerging mining corridors in Odisha, Tamil Nadu, Kerala, and the Hyderabad region.

Analysts say India’s evolving strategy reflects a broader shift toward building a complete and sustainable rare earth ecosystem—from mining to advanced manufacturing. The world is increasingly looking to India as a critical player in this field. It is now up to India to seize clear dominance.

@ Ricky Chopra is a senior international lawyer deeply engaged with geopolitical affairs, with a keen eye on the dynamic interplay among international law, business and global political realities