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2 Feb 2026·Source: The Hindu
5 min
EconomyScience & TechnologyEnvironment & EcologyNEWS

India to Establish Rare Earth Corridors to Reduce China Dependence

India plans rare earth corridors to boost domestic mining, reduce China reliance.

India to Establish Rare Earth Corridors to Reduce China Dependence

Photo by Takemaru Hirai

Finance Minister Nirmala Sitharaman announced government support for mineral-rich states like Odisha, Kerala, Andhra Pradesh, and Tamil Nadu to establish rare earth corridors. These corridors aim to promote mining, processing, research, and manufacturing of critical minerals. This initiative seeks to reduce India's dependence on China, which currently supplies over 45% of India's rare earth imports. India's rare earth imports increased from $14.1 million in 2014 to $17.5 million in 2024. China's dominance stems from its resource availability and long-standing strength in mining and research capacity. Rare earth elements (REEs) are essential for clean energy technologies, defense applications, and high-tech devices. China holds nearly half of the global reserves and dominates the value chain with around 92% of global refining capacity.

Key Facts

1.

Rare earth corridors: Odisha, Kerala, AP, Tamil Nadu

2.

China's share in India's REE imports: Over 45%

3.

India's REE imports (2024): $17.5 million

UPSC Exam Angles

1.

GS Paper 3 (Economy): Resource mobilization, industrial policy

2.

GS Paper 2 (International Relations): Bilateral agreements, trade dependence

3.

GS Paper 1 (Geography): Distribution of key natural resources

Visual Insights

Rare Earth Corridor States in India

Map highlighting the states where rare earth corridors are planned to be established.

Loading interactive map...

📍Odisha📍Kerala📍Andhra Pradesh📍Tamil Nadu
More Information

Background

The story of rare earth elements (REEs) is deeply intertwined with global industrial and technological advancements. Initially, REEs were primarily used in niche applications like lighter flints and polishing compounds. However, their unique properties, such as exceptional magnetic and catalytic capabilities, led to their integration into a wide array of high-tech devices and clean energy technologies. This increased demand has made them strategically important. China's dominance in the REE market is a result of a combination of factors. Firstly, China possesses some of the world's largest reserves of REEs. Secondly, the country has invested heavily in developing its mining, processing, and refining capabilities over several decades. This has allowed China to establish a near-monopoly over the global REE supply chain, giving it significant economic and geopolitical leverage. The WTO has previously ruled against China's export restrictions on REEs. Several countries, including the United States, Australia, and India, are now actively seeking to diversify their REE supply chains. This involves investing in domestic mining projects, developing alternative processing technologies, and forging strategic partnerships with other resource-rich nations. The goal is to reduce reliance on China and ensure a stable and secure supply of these critical minerals for their own industries and national security. This push aligns with broader efforts to promote Atmanirbhar Bharat in strategic sectors. Historically, the management of mineral resources in India has been guided by the Mines and Minerals (Development and Regulation) Act, 1957. This act provides the legal framework for the regulation of mines and the development of minerals. Amendments to this act have been made over the years to address evolving challenges and promote sustainable mining practices.

Latest Developments

The establishment of rare earth corridors aligns with India's broader strategy to enhance its manufacturing capabilities and reduce import dependence, particularly from China. This initiative complements other government programs such as the Production Linked Incentive (PLI) scheme, which aims to boost domestic manufacturing across various sectors. The focus on mineral-rich states like Odisha, Kerala, Andhra Pradesh, and Tamil Nadu highlights the importance of regional development and resource utilization. However, the development of rare earth corridors also faces several challenges. These include environmental concerns related to mining activities, the need for advanced processing technologies, and the establishment of a skilled workforce. Addressing these challenges will require a multi-pronged approach involving government support, private sector investment, and collaboration with research institutions. The success of these corridors will depend on balancing economic development with environmental sustainability. Looking ahead, India's efforts to develop its rare earth industry are expected to intensify. This will involve further exploration of domestic resources, investment in research and development, and the establishment of strategic partnerships with other countries. The government is likely to introduce new policies and incentives to attract investment and promote innovation in this sector. The long-term goal is to create a self-reliant and competitive rare earth industry that can support India's growing economy and strategic needs. The National Mineral Policy 2019 provides a framework for sustainable mineral development. Furthermore, the geopolitical landscape is also influencing India's approach to rare earths. As countries around the world become increasingly aware of the strategic importance of these minerals, there is a growing emphasis on diversifying supply chains and reducing dependence on any single source. India's efforts to develop its rare earth industry are therefore part of a broader global trend towards greater resource security and strategic autonomy.

Frequently Asked Questions

1. What are rare earth corridors and why is India establishing them?

Rare earth corridors are designated zones aimed at promoting the mining, processing, research, and manufacturing of critical minerals. India is establishing these corridors to reduce its dependence on China for rare earth element (REE) imports.

2. Which states are initially involved in the establishment of rare earth corridors?

The states initially involved are Odisha, Kerala, Andhra Pradesh, and Tamil Nadu.

3. What percentage of India's rare earth imports currently come from China?

Over 45% of India's rare earth imports come from China.

4. How have India's rare earth element imports changed between 2014 and 2024?

India's rare earth imports increased from $14.1 million in 2014 to $17.5 million in 2024.

5. What are the key applications of rare earth elements (REEs)?

Rare earth elements are essential for clean energy technologies, defense applications, and high-tech devices.

6. What factors contribute to China's dominance in the rare earth element market?

China's dominance stems from its resource availability and long-standing strength in mining and research capacity.

7. How does the establishment of rare earth corridors align with other government initiatives?

The establishment of rare earth corridors aligns with India's broader strategy to enhance its manufacturing capabilities and reduce import dependence, particularly from China. This initiative complements other government programs such as the Production Linked Incentive (PLI) scheme.

8. What are the potential benefits and drawbacks of India reducing its reliance on China for rare earth elements?

Reducing reliance on China can enhance India's strategic autonomy and boost domestic manufacturing. However, it may also involve higher initial costs and technological challenges in developing a competitive domestic industry.

9. What are the potential environmental impacts of rare earth mining and processing in India, and how can these be mitigated?

Rare earth mining can lead to habitat destruction and pollution. Mitigation strategies include adopting sustainable mining practices, investing in environmental monitoring, and enforcing strict environmental regulations.

10. Why is this topic of rare earth corridors in the news recently?

This topic is in the news due to Finance Minister Nirmala Sitharaman's announcement of government support for mineral-rich states to establish these corridors, aiming to reduce India's dependence on China.

Practice Questions (MCQs)

1. Consider the following statements regarding India's rare earth element (REE) sector: 1. India's rare earth imports increased from $14.1 million in 2014 to $17.5 million in 2024. 2. China currently supplies over 65% of India's rare earth imports. 3. China holds nearly 72% of the global refining capacity for REEs. Which of the statements given above is/are correct?

  • A.1 only
  • B.1 and 2 only
  • C.2 and 3 only
  • D.1, 2 and 3
Show Answer

Answer: A

Statement 1 is CORRECT: According to the news summary, India's rare earth imports increased from $14.1 million in 2014 to $17.5 million in 2024. Statement 2 is INCORRECT: The news summary states that China supplies over 45% of India's rare earth imports, not 65%. Statement 3 is INCORRECT: The news summary mentions that China holds around 92% of global refining capacity, not 72%.

2. Which of the following states is/are being supported by the Indian government to establish rare earth corridors, as per the recent announcement? 1. Odisha 2. Kerala 3. Andhra Pradesh 4. Karnataka Select the correct answer using the code given below:

  • A.1 and 2 only
  • B.1, 2, and 3 only
  • C.2, 3, and 4 only
  • D.1, 2, 3, and 4
Show Answer

Answer: B

The news summary explicitly mentions that the government is supporting mineral-rich states like Odisha, Kerala, and Andhra Pradesh to establish rare earth corridors. Karnataka is NOT mentioned in the summary.

3. Assertion (A): India is aiming to reduce its dependence on China for rare earth elements (REEs). Reason (R): China possesses nearly half of the global REE reserves and dominates the value chain with a significant portion of global refining capacity. In the context of the above statements, which of the following is correct?

  • A.Both A and R are true, and R is the correct explanation of A
  • B.Both A and R are true, but R is NOT the correct explanation of A
  • C.A is true, but R is false
  • D.A is false, but R is true
Show Answer

Answer: A

Both the assertion and the reason are true, and the reason correctly explains the assertion. India's aim to reduce dependence on China for REEs is directly linked to China's dominance in REE reserves and refining capacity, as stated in the news summary.

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