China’s rare earth chokehold may open some doors for India.

India appears to be on the verge of a significant industrial transformation, with rare earth elements (REEs) and other critical minerals taking centre stage. The nation’s strategic push towards self-reliance, spurred by geopolitical tensions and China’s near-monopoly on rare earths, presents a compelling opportunity for investors.

The effort aims to leverage India’s substantial natural resources to support its growing electric vehicle (EV), renewable energy and defence sectors.

The global rare earth market, heavily dominated by China, has come under intense scrutiny due to export restrictions and trade disputes. According to CNBC, China controls an estimated 90% of the global rare earth magnet market. This dominance was highlight in April 2025 when China tightened export licensing for critical REEs like terbium and dysprosium, elements essential to Neodymium-Iron-Boron (NdFeB) magnets used in EV motors, wind turbines and defence systems.

Notably, while China remains the dominant player, its share of global rare earth mining is projected to decline to 51%, and refining to 76% by 2030, as global supply chains diversify, according to a report by CareEdge Global.

As Amit Gupta, Executive Group Vice President at Motilal Oswal Private Wealth, told ET Now, the recent geopolitical crises are catalysing the emergence of new sectors in Indian markets.

Although China holds the largest REE deposits at 44 million tonnes, India’s 6.9 million tonnes give it the third-largest share globally, according to the U.S. Geological Survey. India also possesses about 35% of the world’s beach and sand mineral deposits, as per an EY report. These reserves are especially significant for high-performance applications in EVs, electronics, and defence.

Gracelin Baskaran, Director of the Critical Minerals Security Program at CSIS, said that India is “poised to play a key role in building a more diversified global rare earths supply chain.” However, despite its endowment, India’s output has remained low, just 2,900 tonnes annually from 2012 to 2024, per Statista.

Source: Economictimes