Why India’s Massive Rare Earth Reserves Still Produce Less Than 1% of Global Output

India has the third-largest rare earth reserves in the world, but its global production share is remarkably low due to its limited mining, processing, and regulatory capabilities.

According to a report by Amicus Growth, India has the third-largest reserves of rare earths in the world, yet its production remains among the lowest compared to major global competitors, highlighting a significant disparity between resource availability and actual output.

India is only behind China and Brazil in terms of rare earth oxide (REO) reserves, with around 6.9 million tonnes. With 44 million tonnes of reserves, China leads the list, followed by Brazil with 21 million tonnes.

Australia (5.7 million tonnes), Russia (3.8 million tonnes), Vietnam (3.5 million tonnes), and the United States (1.9 million tonnes) are among the other nations having significant rare earth reserves. However, India's output is still restricted despite its robust reserve base. India produced just 2,900 tons in 2024, placing it eighth in the world. China, on the other hand, produced the most (270,000 tons), followed by the US (45,000 tons) and Myanmar (31,000 tons). Australia, Thailand, and Nigeria each produced roughly 13,000 tonnes.

According to the report, India contributes less than 1% of the world's rare earth production despite holding around 6-7% of the world's reserves. The majority of India's reserves are located in coastal sands that are rich in monazite and include the radioactive element thorium. As a result, mining and processing become more complicated and are governed by stringent laws.

Rare earth mining in India has historically been slowed down by regulatory obstacles, with production mostly limited to Indian Rare Earths Limited (IREL), where rare earth elements were viewed as byproducts rather than key resources. The paper identifies processing and refining as the largest obstacles, aside from mining. China controls almost all heavy rare earth processing and around 90% of the world's refining capacity, despite the fact that several nations have supplies of rare earth elements. India, on the other hand, has virtually little infrastructure for processing and refining.

According to the reports, India's yearly output of rare earths is still only a few thousand tons, meaning it plays a very small part in international trade. Even while a joint venture in Visakhapatnam with ties to Japan represents a return to the industry, its scope is still modest. Rare earth reserves are thought to be between 90 and 110 million tonnes worldwide, with China controlling about half of the supply and manufacturing. According to the report's conclusion, India's main obstacles are execution, processing capacity, and value-chain integration rather than the availability of resources; without these, its reserves won't have a significant impact on the world stage.