Highlights
- India is developing a ₹1,500 crore incentive scheme to boost domestic recycling of rare earth minerals critical for electric vehicles and defense technologies.
- The National Critical Mineral Mission aims to secure mineral supply chains by targeting exploration, processing, and recycling of strategic minerals.
- Chinese export restrictions have created urgent supply challenges for Indian manufacturers, with rare earth magnet inventories potentially lasting only four weeks.
India is fast-tracking a major policy push to recycle critical minerals such as neodymium, dysprosium, terbium, and samarium—rare earths vital for electric vehicles and defense applications—as the nation grapples with a worsening rare earth magnet supply crisis triggered by Chinese export restrictions. This effort was reported (opens in a new tab) by Mint journalists Swarnali Mukherjee and Rituraj Baruah in a June 7, 2025 report.
At a critical minerals seminar last week, India’s Mines Secretary V.L. Kantha Rao (opens in a new tab) confirmed that a ₹1,500 crore (~$180 million USD) incentive scheme is in its final approval stages. The plan, backed by the Ministry of Mines, aims to kickstart domestic recycling efforts of used permanent magnets and other secondary sources of critical minerals. This comes amid a broader effort to amend the Mines and Minerals (Development and Regulation) Act to enable recovery of rare metals from mine tailings, fly ash, red mud, and other industrial byproducts.
“This scheme will bridge the gap as India’s sector matures,” said Pratyush Sinha of Lohum (opens in a new tab), one of the few active players in India’s nascent critical mineral recycling sector. He warned that while the immediate contribution to rare earth demand will be modest, long-term strategic independence depends on building local capacity now.
The urgency is acute: Indian automakers are reporting dangerously low inventories of rare earth magnets. Applications for magnet imports are reportedly stalled in China, despite resumed exports to other countries. According to industry sources cited in Mint, Indian manufacturers may have as little as four weeks of supply remaining.
China's grip on rare earths remains unyielding, and India's dilemma underscores how fragile global diversification efforts truly are. Recycling may not be a silver bullet—but without it, nations like India are left defenseless in the face of supply chain weaponization.
The proposed scheme reflects India’s broader National Critical Mineral Mission, which aims to liberalize regulation and encourage recovery of high-value trace minerals from legacy waste. Officials also hinted at plans to revise royalty structures to make secondaryextraction economically viable—a long-overdue policy shift in acountry rich in mining waste but lacking the infrastructure to exploit it.
Bottom Line
While still in early stages, India’s policy momentum signals a clear recognition: without domestic recovery and recycling of rare earths, the country’s clean energy and automotive ambitions risk derailment. But success will depend not just on funding, but on swift regulatory reform, private sector mobilization, and technological breakthroughs in rare earth recovery—areas where China already enjoys a decades-long lead.
The National Critical Minerals Mission
India has launched the National Critical Mineral Mission (opens in a new tab) (NCMM) for FY 2024–25 to FY 2030–31, allocating ₹16,300 crore (USD 1.9 billion) and expecting ₹18,000 crore (USD 2 billion) in public sector investment to secure critical mineral supply and build domestic value chains. The NCMM covers exploration, processing, recycling, stockpiling, and research. It targets 1,200 exploration projects and domestic production of at least 15 critical minerals, acquisition of 50 global mining assets, and recovery of 400 kt of recycled material. Plans include a national stockpile of five critical minerals, four mineral processing parks, three Centres of Excellence, and 1,000 patents by 2031, all coordinated by a new Empowered Committee on Critical Minerals.
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