From mines to magnets: How India plans to counter China’s rare earth grip | The power game explained

This photograph taken on June 22, 2021 shows a vial filled with rare earths (terres rares) after they were extracted from electronic waste at the Bureau de Recherches Geologiques et Minieres (BRGM) (Geological and Mining Research Office) in Orleans, central France. (Photo by Christophe ARCHAMBAULT / AFP)

India is ramping up rare earth mineral production to reduce reliance on China, launching a Rs 7,280 crore magnet manufacturing scheme and dedicated corridors. These efforts aim to build domestic capacity for critical tech and defense, amid global supply chain tensions.

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Rare earth minerals have quietly become one of the most important strategic resources of the modern era. They power everything from advanced missiles and fighter jets to electric vehicles, smartphones and semiconductor manufacturing. As global tensions grow, control over these minerals is increasingly shaping geopolitical competition.

China currently dominates the global rare earth ecosystem, not only in mining but also in processing and refining. Investigations by international media outlets have suggested that Beijing has begun tightening control over supplies, effectively positioning itself as a gatekeeper for critical minerals used in high technology and defence systems.

For countries like India and the United States, this has raised serious strategic concerns. Yet India has begun taking significant steps to reduce its dependence and build a resilient domestic rare earth ecosystem.

India’s push for domestic rare earth capacity

India has launched a major policy effort to strengthen its rare earth supply chain. In November 2025, the government approved a Rs 7,280 crore scheme focused on Rare Earth Permanent Magnet manufacturing.

The programme aims to create an integrated domestic manufacturing capacity of 6,000 metric tonnes per year. These magnets are critical components used in defence systems, renewable energy technologies and modern electronics.

A Press Information Bureau release dated February 2, 2026 explained the broader goal of the programme. According to the PIB, “the target is not just to produce magnets. The aim is to build the kind of industrial depth that makes a country resilient when a foreign supplier cuts the line."

The initiative represents a shift from relying on imports toward building an entire domestic value chain.

Dedicated corridors for rare earth development

The Union Budget for 2026 to 2027 further accelerated the effort by announcing Dedicated Rare Earth Corridors across Odisha, Kerala, Andhra Pradesh and Tamil Nadu.

These states contain large deposits of monazite, a mineral rich in rare earth elements. According to the PIB, India’s monazite reserves contain an estimated 7.23 million tonnes of rare earth oxides.

The corridor model aims to connect mining, processing and manufacturing infrastructure, allowing India to transform raw mineral resources into strategic industrial capability.

However, experts stress that geological wealth alone is not enough.

Anil Trigunayat, former Ambassador and High Commissioner, highlighted the importance of technological capacity. He said, “Just the availability of rare-earth elements and critical minerals is not enough. Processing capability and technological edge are an absolute imperative while we tie up with some reliable partners in Africa, Russia and the Americas. Priority must be accorded as time is at a premium."

China’s tightening grip on critical minerals

The urgency behind India’s efforts is partly driven by concerns over China’s control of key minerals.

A Reuters report from February 26, 2026 highlighted how suppliers to US aerospace firms are now rationing Yttrium, a rare earth element essential for jet engines. Prices for the mineral have reportedly surged to levels nearly 69 times higher than a year earlier.

At the same time, the supply of Scandium, which is used in 5G chips and high-performance electronics, has also become constrained.

Dylan Patel, CEO of SemiAnalysis, told Reuters that “the United States has zero domestic scandium production and no operational alternative supply outside China. Stockpiles are currently measured in months, not years."

A separate investigation by The New York Times revealed another vulnerability involving Samarium, which is used in components such as Tomahawk cruise missile fin actuators.

A temporary solution was found in a French stockpile, but the long term outlook remains uncertain. Grant Smith of Less Common Metals estimated that the reserve provides the West “roughly a year of runway. What comes after that is still not settled."

Why the challenge matters for India

Rare earth minerals are also crucial for India’s defence systems.

Platforms such as the BrahMos missile, the Akash air defence system and the Tejas fighter aircraft depend on materials that fall within the rare earth ecosystem.

Developing domestic capabilities will therefore require sustained technological investment and industrial partnerships.

Policy expert Anurag Awasthi explained the scale of the task in comments to CNN-News18. He said, “Technology is a costly commodity, and it requires years to develop it to a competitive threshold. To this end many technological collaborations with mutual benefits need to be ascertained and configured…There is a need to acknowledge this space as a ‘Strategic Sector’ with policy interventions to make this sector lucrative and competitive for entrepreneurs with adequate incentivisation. This will be the key to future high technology dreams including chip manufacturing and critical electronics…The present talent, astute policy interventions, infusing a public private partnership model and curating multilateral JVs in this space could accrue rich dividends for India in the future strategically, economically and technologically."

The Sanand semiconductor milestone

India’s growing ability to execute large technology projects was demonstrated on February 28, 2026 with the inauguration of Micron Technology’s semiconductor facility in Sanand.

Prime Minister Narendra Modi described the project as “a symbol of a crucial partnership between India and the United States in securing the global supply chain, particularly in chips and artificial intelligence."

The facility represents a major industrial milestone. Micron CEO Sanjay Mehrotra said the Phase 1 cleanroom “spans five lakh square feet, making it one of the largest raised floor cleanrooms in the world."

The construction required three and a half times the iron used in the Eiffel Tower.

Union Minister Ashwini Vaishnaw also highlighted the rapid growth of India’s electronics sector. He said that “electronics manufacturing has registered sixfold growth, and electronics exports have seen eightfold growth in recent years."

A strategic opportunity for India

China still dominates the global rare earth supply chain, particularly in processing and refining. However, the current supply chain tensions are also creating opportunities for countries that invest in building alternative ecosystems.

India’s policy initiatives, industrial investments and international partnerships indicate that the country is steadily positioning itself to reduce dependence and strengthen its role in the global technology supply chain.

The gap between geological wealth and industrial capacity remains significant. Yet the steps taken so far suggest that India is moving toward a future where it can convert its resource base into strategic strength.