India’s Critical Minerals Push Gains Momentum-But Breaking China’s Grip Could Take a Decade or More

Highlights

• India could see a 4–6x increase in critical mineral demand by 2040 driven by electrification, renewables, AI infrastructure, and industrial modernization, but remains 90–93% dependent on Chinese rare earth magnet imports.
• New mining reforms allow leaseholders to expand into adjacent areas and streamline approvals, while India explores unconventional sources like red mud, though commercial extraction remains economically unviable.
• India is building an integrated rare earth ecosystem from scratch, aiming for strategic relevance within 8–12 years, but success depends on execution speed, industrial scale, and building competitive supply chains before geopolitical pressures intensify.

India’s critical minerals ambitions are entering a far more serious phase, according to Dr. Deependra Singh, former Chairman and Managing Director (opens in a new tab) of IREL (India) Limited (opens in a new tab), who argues that the country could experience a 4–6x increase in critical mineral demand by 2040 as electrification, renewable energy, AI infrastructure, industrial modernization, and digital expansion accelerate. In a detailed interview (opens in a new tab) with AL Circle, Dr. Singh said India’s recent mining reforms and industrial policy initiatives could significantly strengthen the country’s role in global critical mineral supply chains. Yet the interview also exposes the scale of the challenge facing New Delhi: despite ambitious policy moves, India remains heavily dependent on China for rare earth magnets, refining capacity, and downstream processing.

At the center of India’s strategy are new mining concession reforms designed to accelerate exploration and improve production economics. The policy changes allow existing leaseholders to expand into adjacent areas, streamline approvals, and reduce regulatory bottlenecks that historically slowed mining development. According to Dr. Singh, these reforms could accelerate capacity expansion, improve geological continuity, and attract greater private and foreign investment into lithium, cobalt, nickel, and rare-earth projects. India is also exploring unconventional sources of critical minerals, such as “red mud,” a byproduct of alumina refining that contains trace amounts of rare earth elements. However, Dr. Singh acknowledged that commercial extraction from red mud remains effectively nonexistent today due to low grades, difficult mineralogy, high alkalinity, and poor economics relative to cheaper imports.

The larger problem is not geology alone—it is the maturity of the industrial ecosystem. India reportedly remained 90–93% dependent on Chinese rare earth magnet imports through FY2025. Dr. Singh openly conceded that India is effectively attempting to build a fully integrated rare-earth and magnet ecosystem “from scratch,” lacking large-scale refining infrastructure, deep commercial magnet manufacturing, supply chain integration, and decades of accumulated process knowledge that China developed over more than 30 years. His estimate that India could achieve meaningful strategic relevance within 8–12 years may prove realistic under favorable conditions—but only if policy execution remains consistent, infrastructure expands rapidly, and private/global capital participates at scale. Any tightening of Chinese export controls or acceleration in global demand for AI, EVs, robotics, and defense could significantly complicate those timelines.

What makes India’s emerging strategy notable is that policymakers increasingly appear to understand a central lesson of what Rare Earth Exchanges™ calls Great Powers Era 2.0: mining alone does not confer strategic power. The real leverage resides downstream—in refining, separation, magnet production, specialty chemicals, advanced materials, recycling, and industrial ecosystems. India’s reforms represent a meaningful strategic shift away from passive import dependence toward the development of industrial capabilities. But the global race for critical minerals is accelerating rapidly, and the ultimate test will not be policy announcements. It will be execution speed, industrial scale, and whether India can build commercially competitive supply chains before geopolitical pressures intensify further.