While China’s control over exports of rare earth magnets continued to trigger international alarm, government sources told CNBC TV18 that India is looking to hedge supply chain risks. According to sources who talked to the publication, India is exploring alternative sourcing destinations like Australia, Argentina, Brazil, and Chile.
Currently, China produces around 60 per cent of the global supply of rare earth magnets and processes approximately 90 per cent of the supply, including sourcing of raw materials from other countries. These elements are extensively used in heavy industries, robotics, batteries, and military equipment.
India, which holds around 6 per cent of the world’s rare earth reserves, is stepping up efforts to become a credible alternative supplier. The report further maintained that efforts are being made to ramp up production under the National Critical Minerals Mission (NCMM), along with promoting recycling through a circular economy model.
Pointing to Africa’s support for China in trade and supply of raw materials, the CNBC TV18 report maintained that increased sourcing of Lithium from Chile is vital for India’s plans to convert 50 per cent of all new vehicles into EVs by 2030.
On June 17, Union Minister of Coal and Mines G Kishan Reddy had held an inter-ministerial meeting with Union Minister for Heavy Industries and Steel HD Kumaraswamy and officials from the Ministries of Atomic Energy, Steel, Heavy Industries, and Commerce. Deliberations were held to pave the way for India to become self-reliant in the rare earth magnets.
China leads in rare earth element (REE) reserves with 44 million tonnes, while India holds the third-largest deposits globally at 6.9 million tonnes, according to the US Geological Survey, trailing only Brazil. Further, an EY report highlighted that India possesses over one-third of the world’s beach sand mineral deposits which is a key source for REE extraction.
Meanwhile, India has also asked state-run miner IREL to suspend a 13-year-old agreement on rare earth exports to Japan. The 2012 agreement between IREL and Toyotsu Rare Earths India—a subsidiary of Toyota Tsusho—facilitates the processing and export of rare earths, primarily neodymium, to Japan. In 2024 alone, Toyotsu exported over 1,000 metric tons of rare earth materials to Japan.