UNI NEWS ANALYSIS
BY RAMESH BHAN

New Delhi, Feb 4 (UNI) The announcement of Dedicated Rare Earth Corridors in the 2026-27 Budget signals India’s arrival in the Global Rare Earth Rivalry as Rare Earth Materials are the new "global currency" of strategic power, often described as the "primary currency of national security."
Finance Minister Nirmala Sitharaman, while presenting the Budget in Parliament on February one, announced Dedicated Rare Earth Corridors in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu for mining, processing, research, and manufacturing of Rare Earth Permanent Magnets (REPMs).
‘’India is taking decisive steps toward self-reliance in Critical Materials by establishing a domestic ecosystem for Rare Earth Permanent Magnets (REPMs). These initiatives align with the national priorities of Atmnirbhar Bharat, Net Zero 2070, and Viksit Bharat @2047, while positioning India as a key player in global advanced-materials value chains,’’ an official spokesman said.
(The REPMs are among the strongest types of permanent magnets, known for their high magnetic strength and stability. Their compact size and powerful performance make them indispensable for advanced engineering applications such as Defence equipment, electric vehicles (EVs), wind turbine generators, consumer and industrial electronics, aerospace systems and precision sensors.)
The critical importance of Rare Earth Minerals is underlined by a Ministerial conference on Critical Minerals that is being organised by the US in Washington on February four (today). Chaired by Secretary of State Marco Rubio, the event brings together delegations from more than 50 countries to address supply chain vulnerabilities and reduce dependence on dominant suppliers like China.
Critical Minerals or Rare Earth Minerals are often used inter-changeably but they represent different categories. Nevertheless, they are both important for future Defence and Energy requirements and are considered the next oil. That is why all powerful economies compete for dominance in the critical sector of this future economy.
Just as oil was key to progress in the last century, Critical Minerals are crucial to this century's energy requirements. Therefore, securing these minerals is a top priority for every country because they are the physical foundation of both modern warfare and green energy transition.
Critical Minerals are a broad, strategic classification for minerals essential for economic and national security that are at high risk of supply chain disruption. This list is dynamic and varies by country; for example, the U.S. currently lists 50 minerals, including lithium, cobalt, nickel and graphite.
Rare Earth Minerals, on the other hand, are a specific subset of 17 elements which are relatively abundant in the earth's crust but are rarely found in concentrated enough quantities to be mined economically. However, all are considered "critical and oil of the 21st century.' Just as oil dictated 20th-century power, control over mineral refining (currently dominated by China) has become a primary tool of diplomatic and economic influence. Much like oil in the 20th century, Rare Earths now dictate the "grand strategies" of major powers and are indispensable for advanced technology, including advanced missile systems, AI Chips and electric vehicles.
This Rare Earth Rivalry has undoubtedly become the Rare Earth Arms Race that will define global power dynamics for the rest of the decade. The rivalry has shifted from a simple trade issue to a "geopolitical lynchpin" where control over processing and refining—rather than just mining—is the ultimate source of sovereignty.
This has led to the weaponisation of supply chains, with China using export controls as a strategy.
The United States has launched a 12 billion USD initiative to build a strategic stockpile of critical minerals and reduce dependence on China. The EU has introduced the RESourceEU plan, aiming to mobilise 3 billion Euros by 2026–2027 to develop domestic processing and recycling, including strict new export restrictions on rare earth magnet waste.
India, not far behind, announced Dedicated Rare Earth Corridors to create a self-reliant "end-to-end" ecosystem.
There are concerns that minerals could replicate the "resource curse" seen in oil-rich regions, leading to hoarding, weaponisation of supplies, and resource nationalism. However, unlike oil, which is consumed as fuel, most minerals are used once to build equipment (like batteries) and can potentially be recycled, which may eventually lower long-term demand in a way oil never could.
As this Rare Earth Rivalry continues to dominate future strategies, India expands its manufacturing footprint in clean energy, advanced mobility, and strategic sectors. For this, a reliable domestic supply of REPMs is critical. It not only reduces import dependence but also strengthens India’s competitiveness in global value chains for advanced materials.
India possesses a substantial reserve of Rare Earth Minerals, providing a strong foundation for downstream industries like REPM manufacturing. India holds 13.15 million tonnes of monazite, containing an estimated 7.23 million tonnes of Rare Earth oxides across Odisha, Kerala, Andhra Pradesh, Tamil Nadu, West Bengal, Gujarat, Maharashtra, and Jharkhand.
The Geological Survey of India (GSI) has further augmented reserves, identifying 482.6 million tonnes of rare-earth ore resources in 34 exploration projects. Together, these reserves demonstrate India’s strong raw material base to support the establishment of an integrated REPM manufacturing ecosystem.
Although India has a strong rare-earth resource base, domestic production of permanent magnets is still at a developing stage, with imports mainly from China, meeting most of the demand (nearly 60–80 per cent by value and 85–90 per cent by quantity between 2022–25).
With the consumption of REPMs expected to double by 2030 due to rapid growth in electric mobility, renewable energy, electronics, and Defence applications, India needs to expand domestic capability and invest in this sector to reduce import dependence and ensure long-term self-reliance.
The Budget 2026–27 has placed strong emphasis on building India’s self-reliance in critical materials by complementing the recently approved Rare Earth Permanent Magnet (REPM) Manufacturing Scheme. These measures create a comprehensive framework for strengthening domestic capacity, reducing import dependence, and positioning India as a global leader in advanced materials.
To strengthen India’s self-reliance in critical materials, the government had on November 26, 2025, approved a major scheme for REPMs. This initiative provides financial support and incentives to build a fully integrated domestic manufacturing ecosystem.
The objective is to establish an end-to-end ecosystem from rare earth oxides to finished magnets, ensuring supply for sectors like Defence, electric mobility, renewable energy, electronics and aerospace.
To complement the REPM scheme, the Dedicated Rare Earth Corridors will focus on mining, processing, research, and manufacturing, leveraging the mineral-rich base of these states. The initiative is expected to generate stronger local economies, enhance R&D capacity, and integrate India more deeply into global advanced materials value chains.
India’s recent policy measures reflect how Rare Earth development is being aligned with broader national priorities. The focus is not only on industrial growth but also on Defence, strategic resource security and clean energy.
India’s rare earth and critical minerals strategy is not limited to domestic reforms; it is closely tied to international cooperation to build resilient supply chains.
The Ministry of Mines has entered into agreements with mineral-rich countries like Australia, Argentina, Zambia, Mozambique, Peru, Zimbabwe, Malawi, and Côte D’Ivoire. These partnerships aim to secure long-term access to rare earths and other critical minerals essential for clean energy, advanced mobility, and defence applications.
India is also part of the Indo-Pacific Economic Framework (IPEF), which includes cooperation on clean energy and critical mineral supply chains.
These platforms provide India with opportunities to collaborate on technology, investment, and sustainable mining practices, reducing the risks of supply disruptions.
India’s Rare Earth strategy is moving decisively toward self-reliance by combining strong domestic resource potential with targeted policy and financial support. The Rs 7,280 crore REPM Manufacturing Scheme and the announcement of Dedicated Rare Earth Corridors together create an integrated framework for mining, processing, research, and manufacturing. These measures reduce import dependence, strengthen clean energy and Defence supply chains, and align with national priorities of Atmnirbhar Bharat, Net Zero 2070, and Viksit Bharat @2047. Complementary international partnerships and institutional reforms further ensure resilient access to critical minerals. With coordinated domestic and global initiatives, India is positioning itself as a reliable and competitive player in advanced materials value chains.
Military hardware relies on minerals that can withstand extreme heat, provide immense strength, or enable high-tech guidance systems. Critical Minerals are essential for the strength-to-weight ratio in fighter jets (like the F-22), missiles, submarine hulls, armour-piercing munitions and missile warheads. Rare Earths are crucial for high-strength permanent magnets found in precision-guided missiles (like the Patriot system), radar, and night-vision goggles. Gallium and Germanium are critical for semiconductors, infrared night-vision systems, and advanced radar targeting. Antimony is used to harden lead in ammunition and as a flame retardant in military gear.
An EV requires about six times the mineral input of a conventional car. The core component of lithium-ion batteries, demand is projected to grow by more than 4,000 per cent by 2040.
UNI RB 1648