Highlights

• India announces plans for strategic rare earth mineral reserves to enhance defense manufacturing and global supply chain resilience.
• The government introduces a ₹1,500 crore incentive program for recycling minerals and reclassifies rare earth mines as strategic projects.
• Potential shift from rare earth importer to alternative supplier, with implications for global mineral supply diversification.

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India’s rare earths strategy is no longer just about self-reliance. At a New Delhi event, Defence Ministry official Rajesh Kumar Singh confirmed that the government is considering a strategic reserve of critical minerals — its first public acknowledgement of such a plan. While framed as a buffer for defense manufacturing, the move also positions India to play a larger role in the global supply chain.

From Importer to Supplier

China’s rare earth export restrictions this spring showed how quickly global supply lines can snap. Even a short-lived clampdown on magnet materials — where China produces 90% of the global supply — rattled electric vehicle and wind turbine makers worldwide. For India, this episode underscored both its vulnerability and its opportunity. By establishing reserves and mobilizing domestic resources, New Delhi could eventually shift from being a worried consumer to an alternative supplier.

Policy Levers in Motion

India is already laying the groundwork. A ₹1,500 crore ($170 million) incentive program will recycle rare earths and other minerals from e-waste and batteries, adding to available stock. Earlier this month, the government reclassified rare earth mines as “strategic projects,” a designation that accelerates environmental clearance and shortens timelines for development. Singh also noted that India maintains “reasonable stocks” of critical minerals — an underused base that could be scaled with the right investment.

Global Supply Chain Implications

If India succeeds, its reserves could serve a dual purpose: insulating domestic industry while supplying friendly markets during global shortages. Western governments, already eager to diversify away from Beijing, would likely welcome New Delhi as a partner in critical minerals. The question is whether India can overcome its traditional bottlenecks — bureaucracy, infrastructure delays, and investment gaps — fast enough to turn policy into production. And given the way that President Trump’s India tariffs seemed to push that nation closer to China and Russia, it is an open question of how the US-India relationship will go forward.

For now, India’s announcement is more signal than stockpile. But in a market where perception can shape investment and alliances, the signal matters. India is not just securing its defenses — it is stepping onto the global rare earth stage.

Source: “India considering strategic rare earth reserve, defence official says,” Bloomberg, September 21, 2025.

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