How India's 'rare-earth corridors' will help reduce China dependency
What's the story
The Union Budget 2026 has proposed the establishment of 'rare-earth corridors' in Odisha, Tamil Nadu, Kerala, and Andhra Pradesh. These corridors will focus on mining, processing, research, and downstream manufacturing of rare earth magnets and critical minerals. The move is part of India's larger strategy to cut its reliance on China for critical mineral production across sectors like electric vehicles (EVs), electronics, and energy.
Sectoral impact
Industry welcomes focus on developing new technologies
The industry has welcomed this move, which will focus on developing new technologies for manufacturing rare earth magnets. These magnets are used in a range of applications from phones to defense and space-tech equipment. Sanjiv Ganeriwala, Chairman of the Mining Council Eastern India at ASSOCHAM, said that graphite beneficiation and refining will lead to large-scale battery storage for solar energy and boost vanadium refining for alloys/batteries.
Resource utilization
Exploring rare earth elements in coal mines
As part of its efforts to extract more rare earth elements (REEs) from mineral waste, India is exploring REEs in coal mines. This exploration is aimed at unlocking new revenue streams and improving resource utilization in opencast mines. The government plans to extend this enhanced exploration for REEs beyond overburden from existing mineral-rich areas to include coal mines and the petroleum sector.
Industrial use
National Critical Minerals Mission
Rare earth elements (REE) and processed minerals are extensively used in heavy industries, robotics, batteries, and military equipment. The move to establish 'rare-earth corridors' is part of a larger plan to achieve self-reliance in critical minerals under the National Critical Minerals Mission (NCMM). The initiative also includes studies by government-owned institutions such as the Non-ferrous Materials Technology Development Centre (NFTDC) to identify potential REE deposits.
Risk management
Alternative sourcing destinations for critical minerals
In light of supply chain concerns over critical minerals and REEs, India is looking to hedge these risks by exploring alternative sourcing destinations such as Australia, Argentina, Brazil, and Chile. The government is also focusing on speeding up output from the NCMM and recycling through a circular economy to boost domestic availability. Increased lithium sourcing from Chile has been identified as crucial for India's plans to convert 50% of all new vehicles into EVs by 2030.