Synopsis: India is creating rare earth corridors which will create a self-reliant system for manufacturing rare earth magnets in India, thus minimizing dependency on imports for the sectors such as electric vehicles, renewables, defense, and electronics.
Rare earth metals have become one of the world’s most strategic materials, powering electric cars, wind energy generators, sophisticated electronic devices, space technology, and military weaponry. Even with huge amounts of rare earth reserves, India is largely import-dependent for rare earth magnets. In response to this problem, the government plans to construct four rare earth corridors, a manufacturing plan worth ₹7,280 crore, and many international collaborations to ensure a full-fledged domestic rare earth ecosystem.
The mineral resources are spread in various states like Odisha, Kerala, Andhra Pradesh, Tamil Nadu, West Bengal, Gujarat, Maharashtra, and Jharkhand, making India a country rich in mineral resources that can serve as a strong foundation for carrying out mining activities as per the rare earth corridor concept.
Why Rare Earth Magnets Matter
The Rare Earth Permanent Magnets (REPMs) are vital materials used in electric cars, wind turbines, electronic gadgets, aerospace engineering, military hardware, and manufacturing industries. The strength of magnetism and efficiency of these magnets have made their use imperative in today’s advanced technological era.
Although rich in rare earths, India depends heavily on imports for permanent magnets, where China has an import share of 60-80% by value and 85-90% by volume from 2022 to 2025. Due to the doubling of demand expected by 2030, creating a rare earth ecosystem within the nation has become a necessity.
Dedicated Rare Earth Corridors
1. Odisha
- Odisha plays a crucial role in terms of mining and extracting rare earth metals for India’s rare earth policy. Odisha has 12 rare-earth mineral sites, the highest within the corridor states.
- In addition, it has an IREL Rare Earth Extraction Plant located in OSCOM Chatrapur.
- The plant extracts 11,000 tonnes of rare earth concentrate annually and is assisted by a mineral separation plant that can process 10 lakh tonnes annually.
- The state also has an effective infrastructure for exporting its produce via Paradip, Dhamra, and Gopalpur ports.
- Role in the Corridor: Mining and primary extraction facilities feedstock producer for the entire corridor
2. Kerala
- Kerala has more than 32 million tons of mineral sand deposits in the country, with 1.9 million tons of monazite among its rare earth minerals.
- IREL’s Rare Earths Division has already been set up in Aluva, which produces rare earth oxide and rare earth compounds from rare earth concentrates.
- Kerala plans to make large investments in rare earth minerals and their research facilities such as Rare Earth Critical Minerals Mission.
- Role in the corridor: Refining, high-purity compounds’ production, and applied research
3. Andhra Pradesh
- Andhra Pradesh is striving to become an important manufacturing center within the Indian rare-earth ecosystem due to its large coastline and mineral deposits of beach sands
- IREL’s Rare Earth Permanent Magnet Plant operates in Andhra Pradesh’s Visakhapatnam region. In addition, the state aims to bring ₹50,000 crore worth of investments to beach sands, rare earth minerals, and titanium products.
- In 2026, the announcement of Japanese firm Proterial to invest ₹2,250 crore in building a factory for producing 1,200 tons of NdFeB magnets per annum has been seen as a milestone in the Indian rare-earth sector.
- The factory will serve multiple sectors, including electric vehicles, wind energy, robotics, aerospace, and defense.
- Role in the corridor: Large scale mining, greenfield processing, and integration of titanium ecosystem
4. Tamil Nadu
- Tamil Nadu has both mineral reserves and India’s strongest industrial ecosystem.
- The Manavalakurichi plant of IREL in Kanniyakumari already engages in mineral separation processes, while Tamil Nadu’s automobile, electronics, and engineering industries form ready markets for rare earth magnets.
- The government has now increased its efforts in exploring monazite minerals in the state.
- Role in the corridor: Manufacturing and consumption end use of REPMs – the demand sink of the chain
Also read: Andhra Pradesh vs Tamil Nadu: Which State Will Be South India’s Leading Investment Hub by 2035?
Why India Needs These Corridors
Even with its vast resources, India continues to rely on imports for rare-earth permanent magnets. From 2022 through 2025, imports from China accounted for approximately 60%–80% of imports by value and 85–90% by quantity. There is going to be an increasing demand for these magnets owing to the expansion of the electric vehicle, renewable energy, consumer electronics, aerospace, and defence industries. The four corridors have been designed to establish a completely indigenous supply chain for reducing dependence on imports.
India’s Global Critical Minerals Strategy
India has established collaborations with resource-rich nations such as Australia, Argentina, Zambia, Mozambique, Peru, Zimbabwe, Malawi, and Ivory Coast. KABIL, a partnership between NALCO, HCL, and MECL, seeks to procure mineral resources from foreign territories. Partnership for Minerals Security (MSP), which is all about securing mineral supply chains. The Indo-Pacific Economic Framework (IPEF), which aims at cooperation in energy security and critical minerals. An example includes the Lithium Exploration Agreement signed by KABIL in Argentina, giving India access to strategic minerals.
India’s ₹7,280 Crore REPM Manufacturing Push
The REPM Manufacturing Scheme was announced by the government for the development of the rare earths eco-system in India, and the scheme has been introduced in the year 2025 with an investment of ₹7,280 crores. The development of the eco-system will be done in such a way that from rare-earth oxides, manufacturing would be done till Rare Earth Permanent Magnets (REPM), which could be utilized in several sectors including mobility, energy, electronics, space, and defense.
- Total Outlay: ₹7,280 crore
- Manufacturing Capacity: 6,000 MTPA
- Sales-Linked Incentives: ₹6,450 crore
- Capital Subsidy: ₹750 crore
- Beneficiaries: Up to 5 companies
- Incentive Period: 5 years
Conclusion
Corridors for rare earth minerals that are present in India, as well as REPM project worth ₹7,280 crores, will help India develop an end-to-end chain starting with mining to production of magnets, thereby reducing its dependency on China to source these resources. Abundant in resources and global partnerships, India is working towards acquiring rare earth minerals for EVs, renewables, electronic equipment, and military systems.
Written by Ameet S
