Why rare earth refining is India's most underrated investment opportunity?

India is sitting on one of the world’s most overlooked opportunities in the clean energy and high-tech economy: rare earth refining. Despite holding nearly 8.5 million tonnes of rare earth element reserves, the third-largest globally and around eight percent of the world’ share, India’s production today accounts for less than one percent of global output. This mismatch between potential and performance reveals an investment frontier that is only beginning to be understood.

- RAJESH GUPTA

Rare earths are the hidden backbone of the 21st-century economy. From electric vehicle motors and wind turbines to smartphones, defense systems, and precision manufacturing, they are indispensable to technologies shaping our future. Global demand is soaring, yet refining capacity is concentrated almost entirely in China, which controls about 70 percent of mining and up to 90 percent of refining. This dominance creates vulnerabilities in global supply chains and adds urgency to India’s ambitions of building domestic refining capability. The recent export restrictions by Beijing have only reinforced the message that countries cannot afford to remain dependent on a single supplier.

The Indian rare earth market is already growing rapidly. Valued at 9.03 billion dollars in 2024, up from 8.32 billion dollars year earlier, the sector is expanding on the back of rising demand across electronics, renewable energy, electric mobility, and defense. The rare earth magnet segment alone was worth 637 million dollars in 2024 and is projected to grow at more than five percent annually through 2033. Yet almost all magnets are still imported, with FY25 imports crossing 53,000 tonnes, underlining the urgent need for domestic capacity building.