India’s Rare Earth Paradox: Vast Reserves, Limited Output

India holds the world’s third-largest rare earth reserves at 6.9 million tonnes but produces under one percent globally. Output was about 2,900 tonnes in 2024, far behind China. Regulatory hurdles, monazite-linked thorium, and weak refining capacity limit growth. China dominates processing. Without value-chain integration, India’s vast resources won’t translate into global influence. The imbalance highlights execution gaps across mining nationwide.

India possesses one of the world’s largest endowments of rare earth minerals, yet its contribution to global production remains strikingly small. A recent report by Amicus Growth draws attention to this imbalance, underscoring the disconnect between the country’s geological potential and its actual role in the global rare earth industry.

According to the findings, India holds an estimated 6.9 million tonnes of rare earth oxide (REO) reserves, making it the third-largest holder globally. Only China, with about 44 million tonnes, and Brazil, with roughly 21 million tonnes, rank ahead. Several other nations also feature prominently on the list, including Australia with 5.7 million tonnes, Russia with 3.8 million tonnes, Vietnam at 3.5 million tonnes, and the United States with close to 1.9 million tonnes.

Despite this strong resource base, India’s output tells a very different story. In 2024, the country produced approximately 2,900 tonnes of rare earths, placing it seventh among global producers. China continues to dominate production, extracting around 270,000 tonnes during the same period. The United States followed with 45,000 tonnes, while Myanmar produced about 31,000 tonnes. Australia, Thailand, and Nigeria each recorded production levels of roughly 13,000 tonnes.

The report points out that while India accounts for nearly 6–7 percent of global rare earth reserves, it contributes less than 1 percent to worldwide production. This stark contrast highlights structural and policy challenges that extend beyond resource availability.

A significant portion of India’s rare earth deposits is located in coastal sands rich in monazite, a mineral that also contains thorium, which is radioactive. The presence of thorium complicates extraction and processing, bringing mining activities under stringent regulatory oversight. These constraints have historically slowed the pace of development in the sector.

Regulatory hurdles have played a central role in shaping India’s rare earth industry. For many years, mining and processing activities were tightly controlled and largely managed by Indian Rare Earths Limited (IREL). During this period, rare earth elements were often treated as secondary outputs rather than as strategically important materials, limiting investment and innovation.

Beyond extraction, the report identifies processing and refining as the most significant bottlenecks. While rare earth deposits are spread across multiple countries, the ability to process and refine these materials is highly concentrated. China dominates this stage of the value chain, accounting for about 90 percent of global refining capacity and nearly all processing of heavy rare earth elements. This concentration gives China a decisive advantage from mining through to finished products.

India, by contrast, has minimal refining and processing infrastructure. As the report notes, annual production has remained at only a few thousand tonnes, leaving the country with virtually no presence in global rare earth trade. Although a Japan-backed joint venture in Visakhapatnam signals a renewed entry into the sector, its scale remains modest and insufficient to shift India’s overall standing.

On a global level, total rare earth reserves are estimated at between 90 and 110 million tonnes of REO, with China alone controlling nearly half. This further cements its dominance across both supply and production networks.

The report ultimately concludes that India’s primary challenge is not the scarcity of resources, but shortcomings in execution, processing capability, and integration across the value chain. Without addressing these gaps, India’s substantial reserves are unlikely to translate into meaningful influence in the global rare earth market.