Rare Earth Elements: Status, Applications & India’s Position

• China’s new export curbs on 12 rare earth elements have reignited trade tensions with the US. The US responded by imposing 100% tariffs on Chinese exports effective November 1, 2025.

About Rare Earth Elements (REEs)

• REE are a group of 17 chemical elements.
• They comprise the 15 lanthanide elements, along with scandium and yttrium.
• They are relatively abundant in Earth’s crust.
• They are rare because they are found in low concentrations and mixed with other minerals, making them difficult and expensive to extract.
• REEs are used to make magnets for electric vehicles (EVs), wind turbines, weapons, etc.
• They are used in electric vehicle (EV) motors, medical devices, weaponry, etc.
• REEs are divided into Heavy (HREEs) and Light (LREEs).
• LREEs are abundant, while HREEs are more critical due to their high demand and low availability.
• Among LREEs, neodymium is the most critical as it is extensively used in all mobile phones, medical equipment and electric vehicles.
• HREEs (like dysprosium, yttrium, and cerium) are critical for clean energy technologies; however, due to their limited supply, they have a small market.
• Misleading Name: REEs are abundant in the Earth’s crust but are rarely found in concentrated, economically viable forms, making extraction challenging.

Application of Rare Earth Element

• Electronics: Due to their magnetic and phosphorescent properties, they are essential in smartphones, laptops, flat-panel displays, and headphones.
• Clean Energy: Powering high-performance magnets in wind turbines, electric vehicles (EVs), and solar panels is crucial for the renewable transition.
• Defence Sector: Used in precision-guided missiles, radar systems, sonar, and jet engines—key to strategic and technological superiority.
• Medical Technology: Enable advanced imaging tools in radiation-based cancer treatments, such as MRI and PET scanners.
• Industrial Use: Applied in petroleum refining, high-grade glass polishing, and production of strong, corrosion-resistant metal alloys.

India’s Current Position in Rare Earth Elements (REEs)

• REE Potential: India holds around 6% of the world’s rare earth reserves, indicating substantial untapped resource potential.
• Import Dependency: In FY 2023–24, India imported 2,270 tonnes of REEs, indicating a moderate dependence on external sources.
• Light REE Capabilities: India is currently capable of extracting light REEs from monazite-rich beach sands, especially along the coasts of Kerala.
• Heavy REE Refining Deficit: India lacks the technological and industrial infrastructure for refining heavy REEs, posing a strategic vulnerability in the critical minerals supply chain.

Current Affairs

Significance of REEs for India

• Technological Backbone: REEs like neodymium & dysprosium power EVs, wind turbines, & phones.
• Defense Applications: Essential for fighter jets, missiles, & radar, supporting India’s strategic capabilities.
• Renewable Energy: Key for high-efficiency motors and turbines to meet India’s 2030 energy goals.
• Global Supply Risk: China controls 60–70% of REE production, creating import vulnerability for India.
• Strategic Value: Scarce and critical, REEs ensure technological self-reliance & strategic autonomy.

Factors Behind India’s Limited REE Production

• Low Economic Viability: REEs are abundant but their low concentration in extractable forms and high environmental costs make domestic mining unprofitable.
• Restrictive Mining Regulations: REEs are classified as atomic minerals, which restricts mining rights to government entities like IREL and KMML and limits private sector innovation.
• Lack of Strategic Focus in PSUs: IREL and other PSUs often prioritise more profitable minerals, leading to minimal investment and R&D in REE extraction and processing.
• Disjointed R&D Ecosystem: The atomic minerals tag hinders collaboration, isolating REE development from academia-industry partnerships critical for innovation.
• Ban on Beach Sand Mining: The 2016 ban on thorium conservation limited access to monazite-rich beach sands, causing supply bottlenecks in light REEs.

China’s Position in REE Related Markets

• China has a monopoly in the REEs-related market.
• It accounted for more than 2/3^rd of mined REEs last year.
• It constitutes nearly 90% of global refined REE output.
• It also dominates the supply of rare-earth magnets.
• Recently, China’s new export curbs on 12 rare earth elements have reignited trade tensions with the US.

Consequences for India due to US–China Rare Earth Tensions

• Supply Risk: India imports nearly 90% of its rare earth compounds from China (DGFT, 2024), risking disruption to EV, semiconductor & defence supply chains.
• Import Bill Rise: Rare earth tariffs and curbs could raise input costs for electronics by 20–25% (IEA, 2025).
• Strategic Opportunity: India holds 9 million tonnes of REE reserves (USGS, 2024), giving scope to expand Indian Rare Earths Ltd (IREL) and the Critical Minerals Mission (2023) for self-reliance.
• Geopolitical Leverage: Strengthens India’s position in the Quad Critical Minerals Partnership (2022) and Indo-Pacific Economic Framework (IPEF) to diversify global supply chains.

Consequences for the World due to US–China Rare Earth Tensions

• Supply Chain Disruptions: China controls 92% of global rare earth processing (IEA, 2025).
• Price: Global REE prices surged 35–40% post-export curbs (IEA Market Update, Sept 2025).
• Strategic Decoupling: US, EU & Japan accelerating friend-shoring to Australia, Vietnam, and Africa via Minerals Security Partnership (MSP).

• Environmental Pressure: New mining hubs (Congo, Myanmar) risk fresh ecological damage.

Way Forward

• Supply Diversification: Expand mining & refining partnerships across Australia, Vietnam, and Africa under the Minerals Security Partnership led by the U.S. and allies.
• Sustainable Mining: Promote ESG-based standards via the UNEP Global Mineral Governance Framework, ensuring low-impact extraction and rehabilitation.
• Strategic Stockpiles: Create rare-earth reserves under the G7 Critical Minerals Agreement to cushion price shocks and supply disruptions.
• Recycling & Circularity: Scale up e-waste recovery networks (E.g., Japan’s Urban Mining Model) to recover neodymium and dysprosium from end-of-life electronics.

Securing critical minerals is vital for India’s technological self-reliance and strategic autonomy. A balanced approach of domestic exploration, global partnerships, and a circular economy can ensure long-term resource security and sustainable growth.

Reference: The Hindu 

PMF IAS Pathfinder for Mains – Question 166

Q. India’s dependence on imported Rare Earth Elements presents strategic and economic challenges. Discuss their significance and outline the key limitations in developing a resilient REE ecosystem. (250 Words) (15 Marks)

Foundation Courses

Approach

• Introduction: Begin with the importance of Rare Earth Elements (REEs) for India, highlighting their critical role in technology, green energy, and national security.
• Body: Discuss the significance of REEs and outline India’s limitations in developing a resilient REE ecosystem, including import dependency and regulatory barriers.
• Conclusion: Conclude with a focused way forward, emphasising strategic reforms, investment in domestic REE production, and diversification of supply sources to reduce vulnerabilities.

PMF IAS Pathfinder for Mains – Question 383

Q. Rare earth elements have emerged as the new drivers of economic and technological power. In the backdrop of China–US trade frictions, analyse how India can secure its REEs requirements for sustainable growth and strategic autonomy. (250 Words) (15 Marks)

Approach

• Introduction: Write a brief introduction about rare earth elements and mention China’s dominance.
• Body: Analyse how to secure its REEs requirements for sustainable growth and strategic autonomy, mention challenges and way forward.
• Conclusion: Emphasis on technological sovereignty. And mention the future course of action.