A decade after rare earth elements slipped quietly into India’s policy vocabulary, they are now at the centre of a hard-edged strategic and industrial push.
The Centre on Sunday announced plans to develop dedicated rare-earth corridors across Odisha, Kerala, Andhra Pradesh, and Tamil Nadu, aiming to secure critical mineral supply chains, revive stalled private investment, and reduce India’s heavy dependence on China for materials that underpin electric vehicles, clean energy, defence manufacturing, and advanced electronics.
Strategic shift
The corridor strategy marks a shift from piecemeal mineral auctions to a region-based ecosystem approach, following repeated setbacks in attracting private miners and processors.
Despite India launching a Critical Mineral Mission and approving a ₹7,280-crore incentive scheme for rare-earth permanent magnets, auctions of critical mineral blocks drew a muted response from mining companies. Industry feedback pointed to familiar bottlenecks: the absence of domestic processing capacity, uncertain downstream demand, weak price visibility, and regulatory complexity.
Those vulnerabilities were laid bare after China — controlling about 70% of global rare-earth mining and over 85% of refining — imposed export curbs on key rare earths and magnets, briefly disrupting global supply chains and reinforcing the risks of over-concentration.
Urgency of building domestic capacity
For India, which imports nearly all its high-performance rare-earth magnets, the episode sharpened the urgency of building domestic capacity beyond extraction.
Government officials said the proposed corridors would integrate mining, separation, refining, research, and manufacturing into geographically anchored clusters, backed by infrastructure support, faster clearances, and long-term demand visibility from sectors such as electric mobility, renewables, defence, and electronics.
The aim is to de-risk investment across the value chain rather than push isolated mining projects into an uncertain market.
Industry executives believe the approach could unlock multi-billion-dollar investments by drawing global miners, processors, and original equipment manufacturers into India’s critical mineral ecosystem. Kerala, which has already announced its own corridor plan, has estimated that such a cluster could generate revenues of ₹40,000 crore and create around 50,000 jobs.
“Despite having domestic reserves, the lack of integrated infrastructure from mining to processing, recycling, and manufacturing has limited scale, cost certainty, and investor confidence,” said Gaurav Dolwani, chief executive officer of LICO Materials. “Rare-earth corridors address this by creating connected, region-based ecosystems that integrate extraction, recycling, R&D, and manufacturing, strengthening India’s EV and clean energy supply chains,” Dolwani added.
Rare earth elements are indispensable to modern manufacturing, with limited substitutes. Neodymium, praseodymium, dysprosium, and terbium are critical for high-performance permanent magnets used in EV motors, wind turbines, robotics, and industrial automation.
Samarium-cobalt magnets are essential for defence and aerospace applications, while lanthanum, cerium, yttrium, and europium are widely used in batteries, petroleum refining catalysts, semiconductors, LEDs, lasers, and display technologies.
The four coastal states identified for the corridors anchor India’s rare-earth strategy because of their rich monazite-bearing beach sands. Andhra Pradesh holds the largest reserves, estimated at 3.78 million tonnes across 24 deposits, with Visakhapatnam emerging as a key hub. Odisha follows with 3.16 million tonnes across 12 deposits, while Tamil Nadu and Kerala together account for over 4 million tonnes across more than 80 identified sites.
Visakhapatnam already hosts India’s first Rare Earth Permanent Magnet plant at the Bhabha Atomic Research Centre campus, producing samarium-cobalt and neodymium-iron-boron magnets using indigenous technology. Odisha is focusing on defence, space, and electric mobility applications, while Tamil Nadu and Kerala are positioning themselves as downstream manufacturing and export hubs.
Kerala’s state budget has gone a step further, earmarking ₹100 crore for a Rare Earth Critical Minerals Mission and outlining a corridor linking Vizhinjam port, Chavara, and Kochi. The state has projected investments of over ₹42,000 crore, anchored around Kerala Mineral and Metals Limited and other state-run entities.
Heavy Industries and Steel Minister H D Kumaraswamy said the corridor approach would “significantly strengthen domestic capabilities and reduce import dependence,” while generating skilled employment and promoting innovation.
Industry leaders see the signal as unambiguous. “It’s encouraging that the government is taking an ecosystem approach,” said Rajat Verma, founder and CEO of Lohum. “Upstream, midstream, and downstream are all equally important. Things can’t be done piecemeal.”
Whether the corridor model succeeds will hinge on execution — particularly timely processing capacity, environmental clearances, and assured offtake. But for the first time, India’s rare-earth ambition appears to be moving from scattered policy intent to a structured industrial strategy.