Indian Uncommon Earths extracts uncommon earth parts from seashore sands in Kerala, India.
Pallava Bagla | Corbis Information | Getty Pictures
India, like many international locations, is going through China’s restrictions on uncommon earth exports — and it desires to develop its personal home provides. Consultants say it might turn out to be an essential various to China for companions such because the U.S., however would require far more private and non-private funding within the sector.
In current weeks, the world has been grappling with a uncommon earths scarcity in gentle of these curbs from China. Auto manufacturers across India, the U.S., Japan, South Korea, and Germany have been affected.
In response, Indian officers are evaluating how India Uncommon Earths, a government-owned firm, might be leveraged to extend uncommon earth magnet manufacturing, sources told CNBC-TV18.
The report comes simply days after India’s Union Minister of Commerce and Trade Piyush Goyal known as China’s pause in exports of uncommon earth parts a “wake-up call” for the world and a possibility for India to offer another.
Geoffrey Pyatt, senior managing director of crucial minerals at McLarty Associates and former U.S. assistant secretary of state for power sources from 2022 to 2025, echoed the commerce minister’s statements.
“That is each a wake-up name and a possibility for us to deepen U.S.-India collaboration on a problem essential to future financial competitiveness,” he advised CNBC.
China’s dominance
Beijing lately signaled plans to ease controls, and U.S. President Donald Trump has mentioned {that a} commerce take care of China that features a decision on uncommon earths is “done.” However China’s management of uncommon earth parts (REEs) was not a brand new coverage, with gradual restrictions of worldwide gross sales occurring over the previous two years.
The current scarcity has additional highlighted the dominant place the nation has in REEs: It produces roughly 60% of the world’s provide of uncommon earths and processing nearly 90%, which incorporates supplies imported from different international locations.
That offers Beijing appreciable leverage over a provide of minerals essential for varied fashionable applied sciences, together with robotics, clear power, batteries and navy tools.
India’s potential
It is essential to notice, nonetheless, that REEs are usually not uncommon in nature. Whereas China has the biggest deposits of REEs at 44 million tons, India additionally has a considerable quantity at 6.9 million tons, in line with the U.S. Geological Survey. That offers it the world’s third-largest share of reserves behind that of Brazil.
India additionally has almost 35% of the world’s seashore and sand mineral deposits, that are important sources of essential uncommon earths, in line with a recent report from D. Okay. Srivastava, India chief coverage advisor at EY.
Given these appreciable reserves, India is “poised to play a key position in constructing a extra diversified international uncommon earths provide chain,” Gracelin Baskaran, director of the Crucial Minerals Safety Program on the Heart for Strategic and Worldwide Research, advised CNBC.
Nonetheless, in an effort to use REE reserves, international locations want the power to mine and extract uncooked supplies, in addition to the capability and expertise to course of and refine them for remaining use.
In these areas, Indian Uncommon Earths, which was based in 1950, might current a very good accomplice for international locations equivalent to the USA, Baskaran mentioned, including that it has no Chinese language funding.
India additionally launched the National Critical Mineral Mission in 2025 with the intention of growing an efficient framework for REE self-reliance within the face of China’s restrictions and different threats posed to the geographically concentrated provide chain.
Nonetheless, specialists say that constructing home capabilities shortly is a tall order.
“Going ahead, substantial extra sources should be allotted by central and state governments in addition to the non-public sector for analysis and improvement within the area of uncommon earths,” EY’s Srivastava mentioned in his report.
Sources advised CNBC-TV18 the Indian authorities can also be contemplating non-public sector collaboration with India Uncommon Earths to hurry up home capability. Among the many choices being thought of are authorities incentive schemes and capital subsidies geared toward encouraging native mining and processing.
“India won’t be able to exchange China’s place available in the market, however it could possibly definitely play an essential position in offering a brand new supply of uncommon earths,” Baskaran mentioned.
Within the meantime, Minister of Commerce and Trade Piyush Goyal mentioned, India can also be looking for various sources, and that he hopes Indian firms would obtain import approvals from China quickly.
A delegation of Indian auto trade representatives can also be gearing up for a China go to in an try to expedite their imports of uncommon earth magnets, in line with local reports citing trade sources.