Rare earths crisis: India taking concrete steps to mitigate possible disruptions
New Delhi: As recent export restrictions imposed by China on key rare earth materials disrupt global supply chains, India has been taking a series of steps on the domestic front to mitigate possible disruptions, according to Finance Ministry.
A concerning phenomenon amidst the tariff and trade developments was the imposition of restrictions on the export of rare earth elements (REEs) by China. Minerals such as lithium, cobalt, nickel, and rare earth elements are vital for solar panels, wind turbines, electric vehicles, and energy storage systems.
'Hence, such restrictions are bound to hamper the development of industries such as electric vehicles, defence and renewable energy,' said Finance Ministry's 'Monthly Economic Review for May 2025'.
'A list of 30 critical minerals was identified, with 24 brought under the exclusive auction authority of the Central Government through August 2023 amendments in the Mines and Minerals (Development and Regulation) Act, 1957. The Government of India had also launched the National Critical Mineral Mission (NCMM) in January 2025, a seven-year initiative (2024-25 to 2030-31), to build a self-reliant and resilient framework for securing critical minerals essential to India's clean energy transition and strategic sectors,' according to the Economic Review document.
The NCMM targets 1,200 domestic exploration projects and supports overseas acquisitions by both PSUs and private entities. It also aims to strengthen the entire value chain through patents, skill development, mineral processing parks, and recycling of secondary sources.
India is also expanding offshore exploration and forging international partnerships, including with Argentina and Australia, to diversify supply sources.
The country joined the US-led Minerals Security Partnership (MSP) that aims to strengthen critical mineral supply chains through public and private sector investment. India is the only developing country member in the 14-member MSP.
'Further, India is investing abroad in exploring and acquiring critical mineral assets in resource-rich countries. A Joint Venture, Khanij Bidesh India Ltd. (KABIL), has been incorporated with the objective of acquiring critical mineral assets abroad,' said the Economic Review.
Under the NCMM mission, the Geological Survey of India (GSI) has intensified its exploration programmes. In the 2024-25 field season, GSI had taken up 195 projects, focused on identifying and assessing critical mineral deposits.
The guidelines for setting up Centres of Excellence (CoE) under the NCMM were issued in April 2025. CoEs will identify, develop and implement extraction processes and beneficiation technologies for a host of critical minerals from multiple sources and conduct directed R&D to reach Technology Readiness Levels.
The Minerals (Evidence of Mineral Contents) Amendment Rules, 2025, were notified by the Ministry of Mines on June 12, 2025, to revise the exploration norms for establishing "evidence of mineral contents" in respect of REEs in a mineral block.
This is crucial for determining when a mineral block is ready to be auctioned for mining or composite licenses, for rare earth elements.
Earlier this week, Union Minister for Heavy Industries and Steel, H.D. Kumaraswamy, said the government is likely to take a decision within the next 15 to 20 days on launching a subsidy scheme to support domestic production of rare earth magnets. The scheme is aimed at reducing India's dependence on China for critical components used in electric vehicles and other high-tech industries.
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